Scottish & Newcastle, the UK-based brewers, used its free cash flow to cut its pension deficit by £157 million ($300 million), according to its preliminary results for the year ending December 31. The company made a one-off special contribution of £200 million at the end of April 2004 after an actuarial valuation showed the pension scheme was in deficit. This reduced the net interest charge on the pension liability for the full year from £17 million to £7 million and the net pension liability in the balance sheet from £419 million to £262 million.
As a result of the contribution net debt increased from £1.99 billion at December 2003 to £2.06 billion at December 2004.
"Going forward into 2005 I am confident that we will continue to deliver a good cashflow performance," said Ian McHoul, S&G's group finance director. "The focus in the business now on cash is so much greater than it was perhaps a couple of years ago. Capital expenditure is coming down, working capital management is improving."