Mr. Davis: Some parts of Imperial date back to the late 1700s, but in essence Imperial was formed in 1901, when 13 British tobacco companies merged in order to fight off competition from the American Tobacco Company. It has played a leading role throughout the twentieth century in the UK tobacco industry. Also, back in 1901 Imperial formed BAT as a joint venture with the American Tobacco Company. So we have a long and quite illustrious history. Certainly, in the 1960s, Imperial began to use its tobacco cash flow to acquire branded-product businesses outside of the tobacco industry, notably in brewing, foods, and catering and leisure sectors. However, this effectively weakened the company, and it was acquired in May 1986, by what was then Hanson Trust, an Anglo-US conglomerate. That's where we stayed, as a subsidiary of Hanson, which latterly became known as Hanson Plc. In October 1996, we demerged from Hanson and became a stand alone business, with a listing on the London Stock Exchange. Two years later we listed on the New York Stock Exchange, to better service the American shareholders that we largely inherited from the Hanson years. The company went through a tremendous transformation in the period of Hanson ownership with a massive emphasis on pushing productivity and reducing unit costs, and that was particularly successful. There was a significant amount of rationalisation, not only of the manufacturing facilities, but also of the brand portfolio to bring more focus in an industry that is characterised by brand proliferation. We actually reduced the number of brands so that we could concentrate on focused, core brands. That had the effect of taking our market share back into growth in the UK and, of course, reducing our unit costs, which enabled us to start competing effectively in export markets. Since about 1993-1994 the thrust of the business has been very much to grow internationally. If I go back to the early 1990s, only about 5% of our profit was coming from international operations, and by our half-year in May 2000 that figure had risen to over 45%. So our strategy on de-merger was very much to continue to emphasise productivity and efficiency, to strengthen our already strong UK position, and to grow our international business, fast-track both in Western Europe and in selected emerging markets. That has remained our strategy since de-merger and has been pursued very successfully, augmented by, so far, three significant acquisitions. The first acquisition was in February 1997, when we bought the Rizla business, which is the world market leader in cigarette papers. This was followed in July 1998, with the acquisition of the tobacco business of Douwe Egbert Van Nelle, the world market leaders in roll-your-own tobacco, from Sara Lee. And then in September 1999, we acquired a number of brands and a factory from the newly merged BAT Rothman's combine in Australia and New Zealand. They had to shed some market share for regulatory approval purposes. So those have been our major acquisitions since we de-merged, and they have contributed significantly to the pace of international growth.
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