Interim Results

Paterson Zochonis PLC 13 February 2001 13 February 2001 PATERSON ZOCHONIS plc The directors submit the unaudited accounts of the group for the half-year to 30th November 2000 Consolidated Profit and Loss Account Half-year Half-year to to 30th 30th Year to November November 31st May 2000 1999 2000 £000 £000 £000 Turnover £200,220 £204,796 £409,074 Operating profit 17,317 15,477 29,796 Exceptional income - 5,979 5,979 17,317 21,456 35,775 Investment income 5,826 9,788 14,616 Interest payable (1,007) (3,705) (4,856) Profit before taxation 22,136 27,539 45,535 Taxation United Kingdom (3,210) (5,103) (5,947) Overseas (3,849) (2,779) (7,956) (7,059) (7,882) (13,903) Profit after taxation 15,077 19,657 31,632 Equity minority (1,291) (1,288) (2,667) interests Profit attributable to members of the company 13,786 18,369 28,965 Dividends (3,469) (3,303) (10,971) Profit for the period £10,317 £15,066 £17,994 retained Earnings per ordinary and 'A' ordinary share of 10p After exceptional items 28.24p 37.91p 59.43p Before exceptional items 28.24p 29.08p 50.61p Dividend per ordinary and 'A' ordinary share of 6.50p 6.15p 21.50p 10p Paterson Zochonis plc Consolidated Balance Sheet 30th 30th November November 31st May 2000 1999 2000 £000 £000 £000 Fixed assets Intangible assets Goodwill 525 559 539 Negative goodwill (2,541) - - (2,016) 559 539 Tangible assets 175,409 190,242 179,873 173,393 190,801 180,412 Current assets Stocks 98,244 104,313 92,906 Debtors 60,305 67,700 56,142 Investments 107,788 88,818 102,388 Cash at bank and in hand 11,729 9,411 10,799 278,066 270,242 262,235 Creditors (due within one year) Bank loans and overdrafts (17,899) (55,389) (27,564) Others (89,979) (92,411) (85,171) (107,878) (147,800) (112,735) Net current assets 170,188 122,442 149,500 Total assets less current liabilities 343,581 313,243 329,912 Creditors (due after one year) (20,149) (10,193) (19,744) Provisions for liabilities and charges (8,759) (9,816) (7,718) Net assets £314,673 £293,234 £302,450 Capital and reserves Equity ordinary share capital 4,744 4,744 4,744 Non-equity preference share capital 7,898 7,898 7,898 Total called up share capital 12,642 12,642 12,642 Reserves attributable to equity interests 255,723 239,988 244,681 Total shareholders' funds 268,365 252,630 257,323 Equity minority interests 46,308 40,604 45,127 £314,673 £293,234 £302,450 Paterson Zochonis plc Group Cash Flow Statement Half-year Half-year to 30th to 30th Year to November November 31st May 2000 1999 2000 £000 £000 £000 Cash flow from operating activities 26,665 18,914 72,321 Returns on investments and servicing of finance 4,675 5,277 6,604 Taxation (5,630) (1,713) (9,124) Capital expenditure and financial investment (3,592) (5,738) (6,869) Acquisitions and disposals 1,283 (5,133) (5,133) Equity dividends paid (7,283) (6,476) (9,394) Cash inflow before use of liquid resources and 16,118 5,131 48,405 financing Management of liquid resources (4,959) (2,464) (15,555) Financing (5,642) (7,171) (24,119) Increase / (decrease) in cash in the period £5,517 £(4,504) £8,731 Reconciliation of net cash flow to movement in net funds Increase / (decrease) in cash in the period 5,517 (4,504) 8,731 Cash outflow from financing 5,642 7,171 24,119 Cash outflow from management of liquid resources 4,959 2,464 15,555 Change in net funds resulting from cash flows 16,118 5,131 48,405 Currency retranslation (123) 520 29 Deposits and loans in former associate now consolidated as a subsidiary - 8,263 8,263 Movement in net funds in the period 15,995 13,914 56,697 Opening net funds 85,623 28,926 28,926 Closing net funds £101,618 £42,840 £85,623 Reconciliation of operating profit to operating cash flows Operating profit 17,317 21,456 35,775 Amortisation of goodwill (18) 13 22 Depreciation and adjustments on disposals 8,528 8,282 15,505 Provisions 1,001 915 1,754 Stocks (4,347) (753) 16,893 Debtors (4,421) (3,485) 8,527 Creditors 8,605 (7,514) (6,155) Net cash flow from operating activities £26,665 £18,914 £72,321 Paterson Zochonis plc Group Cash Flow Statement continued Analysis of net funds At 31st At 30th May Cash Exchange November 2000 flow Difference 2000 £000 £000 £000 £000 Cash in hand and at bank 10,799 1,008 (78) 11,729 Overdrafts (10,571) 4,509 (257) (6,319) 5,517 Loans due within one year (16,993) 5,642 (229) (11,580) Deposits 83,690 (508) 441 83,623 Other current asset investments 18,698 5,467 - 24,165 4,959 £85,623 £16,118 £(123) £101,618 Statement of Total Recognised Gains and Losses Half-year Half-year to 30th to 30th Year to November November 31st May 2000 1999 2000 £000 £000 £000 Profit for the period 13,786 18,369 28,965 Currency retranslation 922 (7,474) (7,474) Reversal of taxation on Nigeria revaluation - - 1,765 surplus Expenses of Nigeria rights issue (197) - - Total recognised gains and losses for the period £14,511 £10,895 £23,256 Paterson Zochonis plc Operating and Financial Review Highlights * Operating profits before exceptional income have increased by 11.8% to £ 17.3m from £15.5m. * Net funds have increased by £16m to £101.6m. * The interim dividend has been raised by 5.7% from 6.15p to 6.50p. Europe Operating profits have increased significantly within the UK as a result of the focus on margin improvement and also the market success of Imperial Leather Foamburst. The packaging of the Imperial Leather range has been redesigned and is being launched over the next few months. Profits have continued to improve in Eastern Europe with the actions taken to reduce costs. The market remains difficult in Poland, although export sales to Russia are expanding. Although tight monetary policy is being maintained in Greece, our olive oil and margarine business is showing signs of improved performance. Asia Overall results in the region have been strong with Indonesia continuing to perform very well with sales growth in excess of 30%. This has been achieved through further expansion of the distribution network and the extension of the brand ranges to cover young children and teenagers. Profits in Australia have risen with a programme of rationalisation of the product ranges, although consequently, turnover is marginally down. Trading in China has continued to be difficult with losses being suffered in the first half. Sales levels remained low as the new distribution network becomes established. Both Thailand and the Middle East have raised profitability. Africa The impact of the action taken by the government in Nigeria and the effect of the higher oil prices have begun to be seen within the economy. Profits have increased in the period. Overall results in the other African units, Ghana, Kenya and Cameroun show some improvement on last year. Investments Cash flow has continued to be positive with net funds increasing to £101.6m at 30th November. The improvement led to an increase in investment income of £1.1m and a reduction in interest payable of £2.7m. Although the equity portfolio performed well against the market over the period, investment gains realised were £5.0m down on the previous year when profits were taken on the portfolio taking opportunity of the high level of world markets. Indexation relief on these gains had resulted in a low tax charge in that period. Paterson Zochonis plc Operating and Financial Review Continued Results and dividends An interim dividend of 6.50p per share for the half-year to 30th November 2000 (1999 - 6.15p) has been declared, payable on 6th April 2001 to ordinary and 'A' ordinary shareholders on the register on 9th March 2001. £000 £000 Profit for the period 13,786 Dividends: Preference shares 71/2% cumulative 29 10% cumulative 356 385 Ordinary and 'A' ordinary shares Interim at 6.50p 3,084 Profit retained £10,317 Directors Mr P. Giouras, after almost 43 years service, and having reached normal retirement age, has expressed his intention to step down as a director of the company at the end of May 2001. Mr Giouras' entire career has been spent in the development and expansion of our operations in Africa for which he has been regional director for the last 11 years. He used this experience to great effect more latterly when he took over responsibility for the group's businesses in the Far East. Mr R.H. Sellers joined the board on 1st January 2001 as a non-executive director. Rod Sellers retired from the board of British Vita PLC in mid 1997 for whom, during a career spanning 26 years, he had held the positions of finance director, chief executive and latterly deputy chairman. He is currently chairman of Ultraframe PLC and a non-executive director of SSL International plc. The group will benefit from his extensive experience of manufacturing operations around the world. Outlook The actions taken to increase operating margins and the relative economic stability in our principal developing markets, have resulted in improved operating performance in all our major units. Earnings per share before exceptional items are similar to the same period last year, with the much improved operating performance having largely made up for the one-off investment gains taken in the first half of last year. This trend to higher operating performance is anticipated to continue in the second half of the year. Paterson Zochonis plc Notes Prior year exceptional income arose on the inclusion in the accounts of amounts due from the Nigerian subsidiaries in respect of technical fees and royalties, which were previously accounted for only when received. The half-year figures are unaudited. The figures for the year ended 31st May 2000 are an abridged statement of the group audited accounts for that year. The audited accounts, containing an unqualified audit report, have been delivered to the Registrar of Companies. Copies of the interim statement are being mailed to shareholders on 13 February 2001 and will also be available from the registered office: Cussons House Bird Hall Lane Stockport SK3 0XN Enquiries between the hours of 9.00 a.m. and 5.15 p.m. on 13 February 2001 to: Graham Calder Finance Director Paterson Zochonis plc Tel: 0161 491 8000

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