On the back of this strong financial performance (compound earnings growth of 12% per annum for 2001/2) we carried out a successful refinancing in April this year. UB was able to seek and gain better terms from its lenders as a result of the company’s earnings and margin improvement, leading to savings of £4m a year.
Earnings are up £42m over the first two years since delisting and the ratio of net debt to earnings has fallen from 5.5 times in December 2000 to 3.5 times now.
At the same time, UB has increased net margins from 11.6% to 14.4%.
Having successfully removed more than £70m from its cost base in the last two years, UB has significantly increased investments in its core brands and can continue to operate successfully under its current capital structure.
Malcolm Ritchie
chairman and chief executive
United Bicuits
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PENSION POSITION: Your article on the Rolls-Royce pension fund (Business, last week) was incorrect in a number of aspects.
First, we have not made any “demands” on our staff; we are consulting them about how we can equitably reduce the fund deficit by changing generous benefits and by increasing company contributions.
Second, we have not asked them to delay their retirement by five years or raise the retirement age.
We are seeking to retain our defined-benefit scheme by calculating final pensions on “career average salaries”, with a safety net ensuring pensions of half final salary after 40 years’ service compared with the present two-thirds — a reduction of just over 16%. We are also proposing early-retirement benefits more in line with market practice.
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We propose terminating one AVC scheme, but employees will still be able to contribute to another. By consulting on these issues we hope to reach a satisfactory outcome for all.
John Rivers
director, human resources
Rolls-Royce
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FLIGHT OF FANCY: It was crass of British Airways to concentrate on business and first-class passengers when terrorism and recession had companies questioning the need for executive travel, and exit the economy sector as it was exploding.
Michael Bright
Oxford
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