RETAILING
Spain
Having achieved a further improvement in the performance of Simago, our Spanish supermarket chain, we determined it to be an appropriate time to dispose of this investment in order to focus on the Group's core retailing interests. The sale for some US$108 million was completed in February 1998.

United Kingdom
Sales at Kwik Save (29% owned) in the United Kingdom declined by 7%, due in part to the closure of 107 underperforming stores. There was also a reduction in like-for-like sales, which was partly offset by an improvement in margins. The cost of the New Generation Kwik Save programme affected profit before tax which, for the year ended 30th August 1997, fell by 18% to GBP 74 million. The dividend for the year was maintained at 20 pence per share.

Progress was made with the New Generation strategy that was launched in late 1996. In the short term, however, the benefits were being offset by the start-up costs associated with the roll-out of the concept.

In March 1998, the Group accepted a share offer from Somerfield plc for its 29% interest in Kwik Save Group plc. The Somerfield shares were subsequently sold for the equivalent of some US$290 million, before expenses, producing a profit of some US$80 million which will be included in the Group's 1998 accounts. The sale completes the refocus of the Group's activities on the Asia-Pacific Region.