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Preliminary 2006/07 Alliance Boots plc Earnings Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: This is the Alliance Boots preliminary conference call at 8 AM UK time on the 2nd of May 2007. The host for today's call is Sir Nigel Rudd.

SIR NIGEL RUDD, CHAIRMAN, ALLIANCE BOOTS: Good morning, everybody. I felt that it was important that I was on the call this morning as I expect there will be on a lot of interest in recent developments. We've chosen to go through our results on a conference call rather than a full-blown analyst presentation this morning because we think this is the most appropriate course given the bid situation. This is, I hasten to add, not a reaction to the contents of Monday's financial times. I'll of course be happy to discuss my views on this off-line, but I don't believe this is something for this morning's Q&A session.

In terms of the bid, I wanted to talk through the timetable and process from here for the situation around the dividend as I believe these will be of the greatest interest to shareholders. The bid is being pursued by a scheme of arrangement and the process from here requires o shareholder approval at an EGM, approval at a court hearing and the receipt of the necessary regulatory approvals.

The next thing that will happen is that we'll issue the scheme document. We would expect that this will be posted to shareholders shortly. The scheme document will be set out -- will set out the precise timetable but we would anticipate the scheme being effective by July.

Turning now to the question of dividend. You'll note that the 1139 offer price is inclusive of any dividend that the Board might pay to shareholders between now and completion and they are not recommending a dividend this morning. This is really a matter of trying to keep things as straightforward as possible because the normal payment date of our final dividend would be after the likely completion date of the transaction. And it's clearly easier and more cost-effective to make one payment to shareholders rather than two separate payments.

That's really all I can say about the bid at the moment and recognize that we are restricted by the takeover panel rules. The main business of the day is, of course, our pulmonary results for the first year as Alliance Boots. I now hand over to Richard and George who will take you through the details of what has been a very busy and very successful period for the new group.

RICHARD BAKER, CHIEF EXECUTIVE, ALLIANCE BOOTS: Thank you, Nigel. Good morning everybody and thanks for coming online. I'm aware that most of you will have read the press release, so I'd like to take this opportunity to highlight what I feel are some of the operational and performance highlights in today's results.

Firstly, I think that against a backdrop of one of the biggest mergers undertaken in the UK and in a very competitive trading environment we've delivered a very strong set of results. One of the most pleasing things about today's results has been successfully delivering against our key priorities laid out at the time of the merger.

You'll recall that we said our aim was to start the integration process, deliver on our synergy targets and continue business as usual. Looking back on how far the Company has progressed and with our key profit measure pro forma adjusted earnings up 11.5% year-on-year, I'm proud to say all three have tics against their boxes in today's statement. This performance is a real achievement when compared to the performance of other similar companies going through this degree of change.

Of business as usual, we've seen our UK retail division deliver good like-for-like sales growth at 2.9% and that's despite the impact -- the deflationary impacts of the generic reimbursement clawback back in October. The most pleasing aspect of this performance is that the growth in the UK has been led by the performance of our health and beauty categories with 5% and 5.4% growth respectively.

Many of you will recall that these are the very categories we focused on for a number of years being attractive markets where we can make a real difference through our product offer. The results today demonstrate that these categories, with the right investment and store locations and appearance, dispensing facilities, people and the products can place us in a leading position in health and beauty in the UK.

On the back of this health and beauty led growth in our UK retail business we've delivered a trading profit of 7.7% up on an...