British Sky Broadcasting Group PLC
 
OVERVIEW
 
Total revenue for the twelve months ending 30 June 2003 ('the year') exceeded £3
billion for the first time, an increase of 15% over the year to 30 June 2002 ('
the comparable period') to £3,186 million. Total operating costs before goodwill
and exceptional items increased by 9% to £2,815 million generating an operating
profit margin before goodwill and exceptionals of 12% (2002: 7%). Sky continues
to benefit from strong operational gearing; operating profit before goodwill and
exceptional items increased by 94% over the comparable period to £371 million.
Profit after tax was £190 million, the Group's first full year of positive
earnings since the launch of Sky digital. Since net debt peaked at 31 December
2001 at £1,833 million, the Group has reduced its net debt by £728 million, to
end the period at £1,105 million.
 
 
OPERATING REVIEW
 
At 30 June 2003, the number of direct-to-home ('DTH') satellite subscribers in
the UK and Ireland was 6,845,000 representing a net increase of 133,000 in the
three months to June 2003 ('the quarter') and an increase of 744,000 in the
year. Sky remains highly confident of achieving its target of 7 million
subscribers by the end of calendar year 2003.
 
As a result of the continued growth in the number of DTH subscribers and the
launch of the digital terrestrial free-to-air service, Freeview, in October
2002, the total number of UK and Ireland households receiving one or more of
Sky's channels increased by 2.0 million to a record 12.2 million in the year.
 
DTH churn for the year stands at 9.4%, a reduction of over one percentage point
on the comparable period. Churn has now been below 10% for four consecutive
quarters.
 
The annualised average revenue per DTH subscriber ('ARPU') at 30 June 2003 was
£366. The increase of 5% over the comparable period reflected the change in
Sky's UK retail prices which was effective from 1 January 2003, along with
increased contributions from products such as Sky+ and the Extra Digibox and
higher usage of interactive services.
 
At 30 June 2003, there were 105,000 subscribers to Sky+ representing an increase
of 77,000 in the year, successfully achieving Sky's target of having 100,000
subscribers by 30 June 2003. Sky+ enhances Sky's reputation for innovation and
continues to lead the growing Personal Video Recorder ('PVR') category in the
UK. The early evidence is that Sky+ customers demonstrate encouraging levels of
customer loyalty and a high propensity to subscribe to top-tier packages. In
addition, at 30 June 2003, there were 165,000 subscribers to the Extra Digibox
representing 111,000 net additions during the year. Approximately 57% of Sky+
subscribers are also Extra Digibox subscribers.
 
Sky digital continues to offer the widest choice in multichannel television in
the UK and Ireland. At 30 June 2003, there were over 395 channels available via
digital satellite, including over 120 channels retailed by Sky, around 160 free
TV and radio channels, and over 85 pay-per-view channels.
 
Sky's own channels have recently increased their potential reach. Under the
terms of an arrangement recently agreed with NTL, Sky One, Sky News and Sky
Sports News will continue to be carried on NTL's digital cable network, for a
further three and a half years. An additional six Sky channels, including Sky
One Mix, Sky Travel, Sky Travel Extra and the recently launched channels from
Sky Music (The Amp, Flaunt and Scuzz), will be distributed on NTL's cable
network for the first time.
 
Sky concluded a new 5-year agreement with the BBC in June 2003 ensuring that all
of the BBC's channels, including all regional variations, will be listed on
Sky's Electronic Programme Guide ('EPG'). The BBC channels are unencrypted but
the BBC has secured a regionalisation service using Sky's conditional access
technology to ensure that Sky subscribers will continue to receive their
appropriate national and regional variation of BBC One and BBC Two. Sky also
announced the renewal for five years of its conditional access agreement with
Channel Five.
 
 
Programming
 
As multichannel penetration continued to rise, the viewing share of Sky channels
across all UK television homes grew to 6.4% for the year compared to 6.1% in the
previous year.
 
Sky News continues to be the leading 24-hour news channel within multichannel
homes, beating the viewing share of BBC News 24 and the ITV News channel
combined. Industry recognition has continued with a second British Academy award
and the Royal Television Society News Channel of the Year award for the second
year running, underlining Sky News' reputation as the home of breaking news.
Over 15 million individuals watched Sky News in the quarter.
 
Sky One continues to lead audience delivery amongst the key 16-34 year old
demographic. The combined viewing share of 16-34 year olds within multichannel
homes of Sky One and Sky One Mix was 5% in the quarter, some 23% higher than
that of Channel Five. Sky One combines a commitment to commissioning and
developing factual entertainment programmes with a growing reputation for fast
turn-around documentaries such as 'Michael Jackson: The Untold Story'.
 
Sky Sports had another strong year. Its viewing share across UK homes grew by
13% on the comparable period and programming was increased across its five
dedicated channels. Memorable moments during the year included Europe's dramatic
Ryder Cup victory at The Belfry, the England Rugby Union team's record-breaking
run of victories against the Southern Hemisphere sides in both the Autumn
Internationals and Summer Tour, and the Cricket World Cup. The live Premiership
match between Arsenal and Manchester United in April attracted Sky's highest
audience for five years with an in-home peak of 3.8 million viewers. On the
final day of the Premiership season Sky Sports' three live matches attracted the
highest ever final day audience and over the entire FA Premier League season,
average audiences were up 17% on the prior year.
 
Over the past twelve months Sky has secured three significant football rights
agreements. In September 2002, Sky won the rights to cover live UEFA Champions
League football for the first time, and from September 2003 will show exclusive
live coverage of all Wednesday matches in the UK and up to six live ties on
Tuesday nights. Sky has also recently announced that it will share the rights
with the BBC to broadcast the Football Association's key properties in a new
four-year agreement commencing at the start of the 2004/05 season. The new
contract has yielded a significant cost saving compared to the existing
contract. Finally, on 8 August 2003, it was announced that Sky had successfully
bid for all four packages of exclusive live UK rights to FA Premier League
football from the beginning of the 2004/05 season to the end of the 2006/07
season. This new agreement offers our subscribers unparalleled coverage of
Premier League football with more games available for live broadcast than ever
before. The total cost of the new agreement for the four UK live packages is
£1,024 million over three years.
 
Sky Movies' share of viewing for the year within multichannel homes was 3.6%
with Saturday Premieres continuing to perform strongly. From June 2003 there has
been a shift in emphasis in movie scheduling away from weekday slots and towards
the weekend line-ups. A record number of megahits were broadcast this year,
almost triple the number shown five years ago. Sky's innovative use of
multiplexes to allow a film to be shown at multiple start times on the same day
has proved to be very popular generating 1.8 million viewers for 'Jurassic Park
III' and 1.3 million viewers for 'Harry Potter and the Philosopher's Stone'. The
same approach will be used for future selected blockbuster premieres.
 
 
FINANCIAL REVIEW
 
Turnover
 
Total revenue for the year grew by 15% to £3,186 million driven by further
strong DTH revenue growth and continued growth in advertising and interactive
revenues.
 
DTH revenue, which now accounts for 74% of total turnover (2002: 69%), grew by
21% to £2,341 million for the year. This growth reflects the 14% increase in the
average number of DTH subscribers and an increase in the non-interactive
component of ARPU, largely driven by the change to Sky's UK retail prices in
January 2003, but also by the introduction of new products such as Sky+ and the
Extra Digibox.
 
Cable revenues, which account for 6% of total revenue, fell by 11% on the
comparable period with the number of UK cable homes and the average number of
premium channels taken by each cable subscriber falling. Sky announced on 23
June 2003 that it had concluded an agreement for the supply of nine basic Sky
channels to NTL, effective until the end of 2006.
 
The termination of ITV Digital's DTT operation on 30 April 2002 has resulted in
a one-off reduction in total wholesale revenue of around 19%.
 
Sky's advertising revenue continued to outperform the market with a 13% increase
on the comparable period to £284 million, principally reflecting the benefit
from strong share deals negotiated with advertising agencies for calendar year
2003, and strong growth in Sky's overall subscriber base. Sky currently expects
this above-market growth to continue for at least the remainder of the calendar
year.
 
Interactive applications continue to contribute to Sky's revenue growth with
total interactive revenue increasing by 17% to £218 million, of which £117
million related to Sky Bet, Sky's wholly owned bookmaker. The increase in
betting revenue was driven by a threefold increase over the comparable period in
the total volume of bets placed to over 15 million, of which 12 million were
interactive television bets. Sky Active revenue amounted to £101 million,
increasing by 11% on the comparable period. The increase was principally due to
the success of interactive advertising and Sky Buy. Interactive advertising is
demonstrating strong potential with revenue increasing 54% on the comparable
period.
 
Other revenue for the year increased by 8% to £141 million, primarily due to
hardware-related revenue on the sale of Sky+ and Extra Digiboxes.
 
 
Programming costs
 
Programming costs increased by 11% to £1,604 million, principally as a result of
contractual increases in sports costs and volume-related increases in movie and
third party channel costs.
 
Sports costs, which represent 45% of total programming spend, increased by £60
million to £723 million. This was principally driven by contractual increases in
rights costs and the costs of non-annual events such as the Ryder Cup and the
Cricket World Cup. Contractual increases were partly offset by savings achieved
by the decisions made not to renew agreements to broadcast UEFA Cup and Scottish
Premier League football, and Six Nations Rugby.
 
An increase in movie costs of £37 million to £397 million reflected the increase
in the average number of movie subscribers, around a 30% increase in the number
of output titles qualifying as megahits over the comparable period, and
contractual increases. The increase was offset by savings resulting from the
continued weakness of the US dollar.
 
DTH distribution fees paid to third party channels rose by £54 million to £351
million, due to the increased number of subscribers, contractual per-subscriber
fee increases and small changes to the channel line-up. These increases were
partly offset by savings generated by the renewal, on improved terms, of
contracts with Flextech and UKTV (five-year agreements from January 2002),
Sci-Fi (a two-year extendable agreement from November 2002) and Cartoon Network
(a five-year agreement from January 2003). In all cases, savings of at least
15% on the pence per-subscriber cost of channel carriage were achieved.
 
Entertainment programming costs increased by £9 million to £94 million
principally due to the scheduling of new acquired programming and the launch of
four new Sky channels during the year (Sky One Mix, Flaunt, The Amp and Scuzz).
Operating costs of Sky News rose by £5 million to £39 million driven
predominantly by the additional costs of coverage of the conflict in Iraq.
 
 
Other operating costs
 
Transmission and related costs before exceptional items decreased by £4 million
to £143 million, mainly due to reductions in technical operations costs.
 
Marketing costs at £401 million declined by £16 million on the comparable period
despite broadly the same number of digital installations. The subscriber
acquisition cost ('SAC') was £207 representing a reduction of £27 on the
comparable period. The reduction was due to the combination of reduced hardware
costs, an increase in install revenues and a greater proportion of direct
acquisitions.
 
Subscriber management costs increased by £33 million to £324 million.
Subscriber management costs comprise two main activities: customer relationship
management ('CRM') costs associated with managing the existing subscriber base;
and supply chain costs relating to systems and infrastructure and the hardware
costs of new products purchased by subscribers such as Sky+ and Extra Digiboxes.
As a result of customer contact centre efficiencies and lower incoming call
volumes, CRM costs per subscriber have fallen by 15%, leading to an absolute
cost reduction of 3% over the comparable period to £148 million. Supply chain
costs increased by 28% over the comparable period to £176 million reflecting the
growth in the number of Sky+ and Extra Digiboxes and costs associated with the
smartcard swap-out as part of stringent on-going anti-piracy measures.
 
Administration costs before goodwill and exceptional items increased by £33
million to £236 million, including increases in insurance costs, and disaster
recovery planning costs.
 
Betting costs increased by £20 million to £108 million directly as a result of
the continued strong growth in betting revenues.
 
Earnings before interest, tax, depreciation and amortisation before exceptional
items ('EBITDA') for the year increased by 72% to £469 million.
 
 
Goodwill
 
Goodwill amortisation increased by £3 million on the comparable period to £122
million. This increase was largely due to a £5 million provision against
goodwill which originally arose on the acquisition of Opta Index Limited ('Opta
'). This provision was made as a result of the Group's announcement in December
2002 that it would close Opta and the carrying value of this goodwill has been
reduced to nil. The Group is currently in negotiations to sell or license some
or all of Opta's assets to a third party.
 
 
Exceptional items
 
During the comparable period, the Group made an exceptional operating provision
of £22 million against the wholesale revenues that it was owed by ITV Digital.
During the quarter, the Group received a payment amounting to £5 million of this
debt generating a credit to the profit and loss account. This operating
exceptional item has been included within operating profit.
 
As reported at the interim results for the financial year 2002/03, the Group has
also made a provision against some of its minority equity investments. This has
led to a net non-cash exceptional charge of £15 million, which is accounted for
below operating profit.
 
The Group recognised an exceptional deferred tax credit of £123 million during
the year. This is explained in more detail in the Taxation section below.
 
 
Joint Ventures
 
The Group's share of net operating profits in joint ventures increased to £3
million in the period, an increase of £80 million on the comparable period,
principally reflecting the cessation of equity accounting for the Group's share
of losses incurred by KirchPayTV from 8 February 2002.
 
 
Taxation
 
The net tax credit for the period includes a current pre-exceptional tax charge
of £85 million and a deferred tax credit of £3 million (which is included within
the total £28 million non-exceptional deferred tax credit) due to the Group
generating profits chargeable to corporation tax in this fiscal year. Before the
effect of goodwill, joint ventures and exceptional items this results in an
underlying effective rate of 31%, slightly higher than the UK statutory rate due
to a number of standard disallowable items.
 
As a result of the significant investment made in digital, and the resultant
losses incurred, the Group has accumulated significant tax losses within
different Group companies.
 
Under the UK Accounting Standard 'FRS19', a deferred tax asset in respect of
these tax losses may only be recognised in the Group's balance sheet at the
point when it is 'more likely than not' that there will be sufficient future
taxable profits to offset the tax losses thereby being capitalised.
 
As the Group's and individual entities' profitability has continued to rise it
has become increasingly possible to satisfy the requirements of FRS19. As
reported with the first half results, during the six months ended 31 December
2002, the Group recognised a £40 million deferred tax asset, principally as a
result of the forecast future profitability of one of the Group's trading
subsidiaries.
 
Subsequently, following a review of the forecast utilisation of tax losses
within the Group, and as a consequence of a planned reorganisation of certain
assets within the Group, the Directors have been able to conclude that the
required FRS19 conditions have also now been satisfied, in respect of other tax
losses in the Group, permitting the Group to recognise a further deferred tax
asset of £123 million, which has been treated as an exceptional credit due its
size. This brings the total deferred tax asset recognised within the year to
£151 million, net of utilisation and an adjustment arising from the prior
period. Following this recognition, the Group has no further significant
unrecognised UK losses, and therefore over the long-term, the Group's ongoing UK
tax charge in the profit and loss account is expected to continue at a rate of
around 31%.
 
After the £85 million current pre-exceptional tax charge for the period, the
£151 million deferred tax credit, the tax charge on exceptional items (£1
million) and Sky's share of joint ventures' tax (£2 million), the net tax credit
for the period was £63 million.
 
During the period, £45 million of Advanced Corporation Tax (ACT) brought forward
was utilised to reduce the Group's cash tax liability.
 
 
Earnings
 
The Group has recorded the first full year of positive earnings since the launch
of Sky digital after generating a profit after tax of £190 million. With the
weighted average number of ordinary shares outstanding during the year
(excluding those shares held by the ESOP trust) at 1,915 million, earnings per
share before goodwill and exceptional items of 10.5 pence per share was
achieved, compared to a loss per share of 2.7 pence for the comparable period.
 
 
Cashflow and interest
 
With EBITDA of £469 million, exceptional items of £5 million and cash generated
from the movement in working capital of £191 million, the Group generated £664
million of net operating cash inflow. This represents the conversion of 179% of
operating profit before goodwill and exceptional items to cash inflow. After
taking into account cash outflows principally comprising net cash interest
payments of £125 million, capital expenditure of £98 million and tax paid of £18
million, net debt decreased by £423 million in the period, from £1,528 million
to £1,105 million. At 30 June 2003, leverage (the ratio of net debt to EBITDA)
was 2.4 times, and interest cover (the ratio of EBITDA to net interest payable)
was 4.1 times.
 
Despite the continued growth of the business, Sky generated cash from the
movement in working capital this year due to a combination of one-off factors
(for example the unwinding of prepayments of certain sports rights) and factors
which will continue to apply as the business continues to grow. The latter
includes Sky's subscription collection cycle, and the payment in arrears for
certain programming costs, such as those incurred in respect of the carriage of
third party channels.
 
Other recurring components of the positive working capital movement include the
reversal, over time, of prepayments made for Sky's long-term satellite
transponder leases, and the accounting treatment for certain share-based
employee remuneration schemes which, under UK GAAP, result in charges to the
profit and loss account, despite being non-cash in nature.
 
Net interest costs of £115 million decreased by £22 million on the comparable
period due to lower levels of indebtedness and lower average interest rates.
 
 
CORPORATE
 
British Sky Broadcasting Group plc ('the Company') had a deficit of £1,120
million on its company-only profit and loss reserve at 30 June 2003. In order to
improve the presentation of the Company's balance sheet and give the Company
greater flexibility in any future distribution policy, the Directors intend to
propose a resolution at the Annual General Meeting to eliminate the deficit by
reducing the Company's share premium account. In order for this to take effect,
the reduction will require the subsequent approval of the High Court.
 
 
 
 
Appendix 1
 
Distribution of Sky Channels
 As at  As at
 30/06/02 30/06/03
 
DTH Digital 1,2 6,101,000 6,845,000
 
Cable - UK  3,486,000 3,266,000
Cable - Ireland 605,000 605,000
 
Total Sky pay homes 10,192,000 10,716,000
 
DTT - UK 3 - 1,510,000
 
Total Sky homes 10,192,000 12,226,000
 
% of all UK and RoI homes 4  39% 47%
 
DTH Churn rate for year to date (annualised) 10.5%5 9.4%
 
 
 
 
1: Includes DTH subscribers in Ireland (286,000 as at 30 June 2003).
 
2: DTH subscribers includes only primary subscriptions to Sky (no additional
units are counted for Sky+ or Extra Digibox subscriptions).
 
3: BARB estimates taken from the beginning of the following month.
 
4: Total UK homes estimated by BARB (latest figures available as at June 2003)
and RoI homes estimated by the Nielsen establishment survey (latest figures
available as at June 2002), calculated using Total Sky homes.
 
5: Excludes analogue churn up to 27 September 2001 and the effect of the
termination of the analogue service on 27 September 2001.
 
 
 
 
Consolidated Profit and Loss Account for the year ended 30 June 2003
 
 Notes Before Goodwill and 2003 Before Goodwill and 2002
 goodwill and exceptional Total goodwill and exceptional Total
 exceptional items £m exceptional items £m
 items £m items  £m
 £m (audited) (audited) £m (audited) (audited)
 (audited) (audited)
 
Turnover: Group turnover and share of  3,262.5 - 3,262.5 2,915.3 - 2,915.3
joint ventures' turnover
Less: share of joint ventures' (76.5) - (76.5) (139.2) - (139.2)
turnover
Group turnover  1 3,186.0 - 3,186.0 2,776.1 - 2,776.1
 
 
Operating expenses, net 2 (2,815.3) (116.7) (2,932.0) (2,584.6) (136.5) (2,721.1)
 
EBITDA 18  468.6 4.8 473.4 272.7 (18.2) 254.5
Depreciation (97.9) - (97.9) (81.1) - (81.1)
Amortisation - (121.5) (121.5) (0.1) (118.3) (118.4)
 
Operating profit (loss) 370.7 (116.7) 254.0 191.5 (136.5) 55.0
 
Share of operating results of joint 3 3.4 - 3.4 (76.7)  - (76.7)
ventures
Joint ventures' goodwill - - - - (1,069.9) (1,069.9)
amortisation, net
Profit on sale of fixed asset 4 - - - - 2.3 2.3
investments
Amounts written off fixed asset 4 - (15.1) (15.1) - (60.0) (60.0)
investments, net
Release of provision for loss on 4 - - -  - 10.0 10.0
disposal of subsidiary
Profit (loss) on ordinary activities 374.1 (131.8) 242.3 114.8 (1,254.1) (1,139.3)
before interest and taxation
 
 
Interest receivable and similar 5 3.7  - 3.7 11.1 - 11.1
income
Interest payable and similar charges 5 (118.2) - (118.2) (148.0) - (148.0)
Profit (loss) on ordinary activities 259.6 (131.8) 127.8 (22.1) (1,254.1) (1,276.2)
before taxation
 
 
Tax on profit (loss) on ordinary 6 (58.7) 121.2 62.5 (28.6) (77.8) (106.4)
activities
Profit (loss) on ordinary activities 200.9 (10.6) 190.3 (50.7) (1,331.9) (1,382.6)
after taxation
 
 
Equity dividends - paid and proposed - -
Retained profit (loss) for the 16 190.3 (1,382.6)
financial year
 
Basic earnings (loss) per share 7 10.5p (0.6p) 9.9p (2.7p) (70.6p) (73.3p)
Diluted earnings (loss) per share 7 10.3p (0.5p) 9.8p  (2.7p) (70.6p) (73.3p)
 
 
 
Details of movements on reserves are shown in note 16.
 
The accompanying notes are an integral part of this consolidated profit and loss
account.
 
All results relate to continuing operations.
 
 
 
 
 
Consolidated Profit and Loss Account for the three months ended 30 June 2003
 
 Before Goodwill and Three months Before Goodwill and Three months
 goodwill and exceptional ended 30 goodwill and exceptional ended 30
 exceptional items June exceptional items June
 items £m 2003 items £m 2002
 £m (unaudited) Total £m (unaudited) Total
 (unaudited) £m (unaudited)  £m
 (unaudited) (unaudited)
 
Turnover: Group turnover and share of 874.6 - 874.6 768.1 - 768.1
joint ventures' turnover
Less: share of joint ventures' (19.1) - (19.1) (20.2) - (20.2)
turnover
Group turnover 855.5 - 855.5 747.9 - 747.9
 
Operating expenses, net (738.6) (24.0) (762.6) (685.7) (25.2) (710.9)
 
EBITDA 143.2 4.8 148.0 83.1 4.1 87.2
Depreciation  (26.3) - (26.3) (20.8) - (20.8)
Amortisation - (28.8) (28.8) (0.1) (29.3) (29.4)
 
Operating profit (loss) 116.9  (24.0) 92.9 62.2 (25.2) 37.0
 
Share of operating results of joint 2.1 - 2.1 (3.2) - (3.2)
ventures
Amounts written back to fixed asset - 3.2  3.2 - - -
investments
Profit (loss) on ordinary activities 119.0 (20.8) 98.2 59.0 (25.2) 33.8
before interest and taxation
 
Interest receivable and similar 0.8 - 0.8 1.0 - 1.0
income
Interest payable and similar charges (25.1) - (25.1) (32.2) - (32.2)
Profit (loss) on ordinary activities 94.7 (20.8)  73.9 27.8 (25.2) 2.6
before taxation
 
Tax on profit (loss) on ordinary (37.9) 121.2 83.3 (12.0) 11.1 (0.9)
activities
Profit (loss) on ordinary activities 56.8 100.4 157.2 15.8 (14.1) 1.7
after taxation
 
Basic earnings (loss) per share 2.9p 5.2p 8.1p 0.8p (0.7p) 0.1p
Diluted earnings (loss) per share 2.9p 5.2p  8.1p 0.8p (0.7p) 0.1p
 
 
 
 
 
Consolidated Statement of Total Recognised Gains and Losses for the year ended
30 June 2003
 
 Notes 2003 2002
  £m £m
 (audited) (audited)
 
Profit (loss) for the financial year  16 190.3 (1,382.6)
Translation differences on foreign currency net investment - 1.4
Total recognised gains and losses relating to the year  190.3 (1,381.2)
 
 
 
The accompanying notes are an integral part of this consolidated statement of
total recognised gains and losses.
 
 
 
 
Consolidated Balance Sheet at 30 June 2003
  Notes 2003 2002
 £m £m
 (audited)  (audited)
Fixed assets
Intangible assets 8 535.9 657.4
Tangible assets 9 346.2 343.0
Investments 10 108.9 128.9
 991.0 1,129.3
 
Current assets
Stocks  11 370.4 414.2
Debtors: Amounts falling due within one year
 - deferred tax assets 30.8 13.9
 - other 363.3 387.0
 12 394.1 400.9
 
Debtors: Amounts falling due after more than one year
  - deferred tax assets 159.0 24.9
 - other 63.9 182.1
  12 222.9 207.0
 
Cash at bank and in hand 46.4 50.3
  1,033.8 1,072.4
 
Creditors: Amounts falling due within one year
 - short-term borrowings 13 (0.2) (1.5)
 - other creditors  13 (955.0) (903.9)
 (955.2) (905.4)
 
Net current assets 78.6 167.0
 
Total assets less current liabilities 1,069.6 1,296.3
 
Creditors: Amounts falling due after more than one year
 - long-term borrowings  14 (1,151.6) (1,576.9)
 - other creditors 14 (20.5) (16.0)
 (1,172.1) (1,592.9)
 
Provisions for liabilities and charges 15 (3.2) (4.1)
 (105.7) (300.7)
 
Capital and reserves - equity
Called-up share capital 16 968.9 946.7
Share premium 16 2,535.5 2,409.8
Shares to be issued  16 2.7 255.8
Merger reserve 16 299.0 266.7
Profit and loss account 16 (3,911.8) (4,179.7)
 16 (105.7) (300.7)
 
 
 
The accompanying notes are an integral part of this consolidated balance sheet.
 
 
 
 
 
Consolidated Cash Flow Statement for the year ended 30 June 2003
 Notes 2003 2002
 £m  £m
 (audited) (audited)
 
Net cash inflow from operating activities 17a 663.6 249.7
 
Dividends received from joint ventures 4.0 -
 
Returns on investments and servicing of finance
Interest received and similar income 3.2 8.8
Interest paid and similar charges on external financing (127.3) (141.0)
Interest element of finance lease payments (0.5) (0.6)
Net cash outflow from returns on investments and servicing of finance (124.6) (132.8)
 
Taxation
UK corporation tax paid (17.6) -
Consortium relief (paid) received  (0.3) 22.5
Net cash (outflow) inflow from taxation (17.9) 22.5
 
Capital expenditure and financial investment
Payments to acquire tangible fixed assets  (98.4) (100.8)
Receipts from sales of tangible fixed assets 0.6 -
Receipts from sales of fixed asset investments  0.8 0.4
Receipts from sales of intangible fixed assets - 0.6
Purchase of own shares for Employee Share Ownership Plan ('ESOP') - (26.9)
Net cash outflow from capital expenditure and financial investment (97.0) (126.7)
 
Acquisitions and disposals
Funding to joint ventures (14.6) (11.6)
Repayments of funding from joint ventures 4.5 4.8
Net cash outflow from acquisitions and disposals (10.1) (6.8)
 
Net cash inflow before management of liquid resources and financing 418.0 5.9
 
Management of liquid resources
Decrease in short-term deposits 17c 0.5 69.5
 
Financing
Proceeds from issue of Ordinary Shares  4.8 14.3
Payments made on the issue of Ordinary Shares (0.1) (1.8)
Capital element of finance lease payments 17b  (1.6) (1.7)
Net decrease in total debt 17b (425.0) (190.0)
Net cash outflow from financing (421.9) (179.2)
 
Decrease in cash 17c (3.4) (103.8)
Decrease in net debt 17c 422.7 18.4