Interim Results
PZ CUSSONS PLC
29 January 2008
29th January 2008
PZ CUSSONS PLC
INTERIM ANNOUNCEMENT OF RESULTS
FOR THE HALF YEAR TO 30TH NOVEMBER 2007
PZ Cussons Plc, a leading consumer products group in personal care and household
products, announces its interim results for the six months ended 30th November
2007.
Results (before exceptional items1) Half-year to Half-year to % change
30/11/07 30/11/06
Revenue £299.5m £279.8m + 7%
Operating profit £32.0m £29.0m + 10%
Profit before taxation £32.5m £30.2m + 8%
Adjusted basic earnings per share 4.69p 4.17p + 13%
Statutory results
Operating profit £34.9m £29.0m + 20%
Profit before taxation £35.4m £30.2m + 17%
Basic earnings per share 5.33p 4.17p + 28%
Interim dividend per share 1.075p 1.000p + 7.5%
Net funds2 £40.2m £35.2m
1 Exceptional items are detailed in note 4.
2 Net funds, above and hereafter, are defined as cash, short-term deposits,
current asset investments less borrowings.
Highlights
• Announcement today of the acquisition of The Sanctuary Brand and Spa for
a consideration of £75m in cash (see separate announcement)
• Good trading performance in all three regions of Africa, Asia and Europe
• Margin improvement initiatives continuing to counter impact of weak US
dollar
• No.1 position in UK Personal Wash category maintained through further
new product launches
• Construction of new UK Personal Wash facility on schedule with
production commencing in spring 2008
• Strong growth achieved in Nigeria, particularly in electrical and
nutrition categories
• Additional nutrition manufacturing capacity in Nigeria now on stream
• £18m investment programme in Nigerian factories announced during period
• Group net funds position at 30th November remains strong at £40.2m
• Interim dividend increased by 7.5% to 1.075p per share from 1.000p per
share
Commenting today, Anthony Green (Chairman) said:
'We have had a successful first half of the financial year, with improvements in
both revenue and profitability versus the same period last year. Our two largest
markets, the UK and Nigeria, continue to deliver good growth supported by
investment in both brand portfolios and manufacturing capability.
The Group's balance sheet remains strong with cash generated from operating
activities and property disposals currently funding our ongoing capital
investment plan. The strong balance sheet has today enabled us to complete the
acquisition of The Sanctuary Brand and Spa. This is an excellent strategic fit
which bolsters our developed market presence and further strengthens our UK
position as leader in the Personal Wash category.
Following this acquisition our balance sheet continues to be strong, giving
flexibility for further investment opportunities as well as a continued growth
in the Group's dividend.
Overall performance since the half-year end has been in line with management
expectations.'
Press Enquiries
PZ Cussons Graham Calder (Deputy Chairman)
Brandon Leigh (Finance Director)
Hogarth John Olsen, Sarah MacLeod, Sarah Richardson
On 29th and 30th January c/o Hogarth on 020 7357 9477.
After 30th January to Graham Calder or Brandon Leigh on 0161 491 8000.
An analysts' presentation will be held on 29th January 2008 at 9.30am at the
offices of JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA.
Overview
PZ Cussons is pleased to report that profit before tax and exceptional items
rose 8% to £32.5 million (H1 2006: £30.2 million) on revenue up 7% to £299.5
million (H1 2006: £279.8 million). After exceptional items reported profit
before tax increased by 17% to £35.4 million (H1 2006: £30.2 million). Basic
earnings per share were 5.33p (H1 2006: 4.17p). Adjusted for exceptional items,
adjusted basic earnings per share rose 13% to 4.69p (H1 2006: 4.17p).
As at 30th November 2007 the Group had net funds of £40.2 million (H1 2006:
£35.2 million).
The board is recommending a dividend increase of 7.5% for the period with an
interim dividend of 1.075p per share (H1 2006: 1.000p) to be paid on 7th April
2008 to shareholders on the register at the close of business on 29th February
2008.
Major projects
Updates on major projects are as follows:
In the UK, construction of the Group's 'Personal Wash Centre of Excellence' in
Manchester is on schedule with production expected to commence during the spring
of 2008 followed by completion of the Research and Development and Fragrance
Development Centres by the end of 2008. As previously announced, the total cost
of £26 million will largely be funded by the proceeds from the sale of the UK
factory sites in Nottingham, Ellesmere Port and Manchester. The sale of the
Manchester site was completed during the period generating proceeds of £4.6
million and giving rise to an exceptional gain of £2.9 million. The sale of
sites at Nottingham and Ellesmere Port are expected to be concluded by the end
of 2008.
In Nigeria, expansion of the manufacturing facilities of the nutrition joint
venture is also on schedule. Expansion of the current factory was completed just
after the period end providing additional capacity for the production of
powdered and evaporated milk. As previously announced, the scope and design of a
second factory has now been finalised and construction will commence shortly
with completion expected by the end of 2008. The Group's share of the total cost
of both projects will be approximately £10 million in aggregate.
In addition, the Group concluded the first part of a major two stage review of
its Nigerian manufacturing facilities, resulting in the approval of an £18
million investment programme. This programme will relocate and modernise the
production facilities for the health and beauty business and also provide
additional logistical and distribution facilities to meet the growing demands of
the electrical goods business.
Trading performance - overview
Operating profit before exceptional items rose by 10% to £32.0 million (H1 2006:
£29.0 million) on revenue up 7% to £299.5 million (H1 2006: £279.8 million).
Profitability has improved in all three regions versus the same period last year
as follows:
Regional reviews
Performance by region
Operating profit before
Revenue (£m) exceptional items1 (£m)
2007 2006 2007 2006
Africa 131.3 111.4 11.4 9.8
Asia 54.4 54.8 4.8 4.3
Europe 113.8 113.6 15.8 14.9
------- ------- ------- --------
Total 299.5 279.8 32.0 29.0
------- ------- ------- --------
Africa
The economic and political climate in Nigeria remains stable and positive
following the elections held in mid 2007, which saw the first transition from
one democratically elected government to another. There has been a noticeable
continuation of the positive reforms begun by the previous administration
leading to good consumer confidence in the country.
Overall, performance in Nigeria has been strong with both revenue and
profitability up on the same period last year. Whilst results have again been
impacted on translation by the further weakening of the US dollar, this impact
has been partially countered by a slight strengthening in the Nigerian Naira.
The Nigerian business continues to be separated into the following business
units:
• Soaps and detergents
• Health and beauty
• Electrical goods (HPZ, a joint venture with Haier)
• Food and nutrition (Nutricima, a joint venture with Glanbia)
• Supply chain and distribution
Soaps and detergents performed well in the period despite an increasingly
competitive environment and continued pressure on margins as a result of further
increases in commodity costs. New product launches in the period included Jet
multi-purpose economy detergent and a relaunch of Elephant Colour detergent.
Sales of health and beauty products were higher than the same period last year
across the portfolio of Robb (medicaments), Venus, Joy and Carex (personal care)
and Cussons Baby. The Pan-African relaunch of the Venus and Joy brands continued
with further product launches during the period in Nigeria, Ghana and Kenya.
Significant top line growth continues in the electrical goods business as a
result of increasing consumer spending power and a strong brand name (Haier
Thermocool). During the period, the product portfolio was extended with the
official launch of commercial air-conditioners. The recently opened Lagos
showroom has proved successful with luxury items performing particularly well.
Further initiatives currently being actioned include the opening of additional
showrooms, the roll-out of nationwide service centres and the opening of a
customer care centre.
The milk and nutrition joint venture with Glanbia continues to make steady
progress and whilst milk costs have continued to rise, selling price increases
have been achieved in the period. Volumes have also increased during the period
with the business now benefiting from the first full year of sales from the
three major brands of Nunu, Coast and Powerfist. Following the period end,
global milk costs have begun to move downwards from their record highs.
In supply chain and distribution, as noted in the major projects section, the
main focus is the two stage review of the Nigerian manufacturing facilities.
Revenue and profitability in Ghana was ahead of the same period last year as a
result of both growth and margin improvement. Sales of both electrical and
nutrition products are continuing to progress well.
First half results in Kenya were in line with the same period last year,
although recent political events are now expected to have a small impact on full
year performance.
Asia
The market for branded detergent products in Australia became very competitive
last year, as a result of the introduction of private label ranges by the two
major supermarket chains. Whilst the competitive conditions in Australia
continue, there have been a number of new product launches in the period which
have helped to contribute to improved profitability versus the same period last
year. These launches include a new water saving technology called 'Aquasave'
which has been applied to both laundry and dishwash detergents.
In Indonesia, the extensions to the baby brand that were launched in the second
half of the last financial year are proving successful, and are further
strengthening the brand's number one position in the market. These extensions
include a 'Baby Needs' range of products such as bottles, plates and feeding
spoons and a new 'basics' range called Cussons Sahaja. Revenue and profitability
for Indonesia, together with the other Asian units, Thailand, Malaysia and the
Middle East, were at a similar level to the same period last year.
Europe
In the UK, performance has been strong across the portfolio of Imperial Leather,
Original Source, Carex, Charles Worthington and Morning Fresh brands, with
improvements in both revenue and profitability versus the same period last year.
The business has retained the number one position in the Personal Wash category,
with a number of new variant and range extensions launched in the period.
Significant brand support campaigns were also run, including a new Imperial
Leather 'Huggable Snuggable Skin' television advertisement and a rerun of the
successful 'Charles Worthington Goes to Your Head' television and print
campaign. Supply chain efforts are largely concentrated on the move of
manufacturing from the current site to the new facility which will begin
operation in the coming months. Finally, in the UK, the Group announced
proposals to close its final salary pension arrangements with effect from 31st
May 2008, both to protect itself from rising costs but also as part of a more
modern global remuneration structure.
In Poland, focus has been on the two core brands of 'E' (clothes detergent,
fabric conditioner and household cleaning products) and Luksja (bar soaps and
shower gels) with profitability at a similar level to the same period last year.
Supply chain efficiencies are now being maximised following the consolidation of
manufacturing operations onto one site which has been achieved over the last few
years.
Profitability in Greece is ahead of the same period last year following further
market share gains across the Minerva range which was relaunched and rebranded
last year. During the period, a small local butter brand was purchased to
strengthen the overall brand portfolio.
Exceptional items
Exceptional items for the period ended 30th November 2007 relate to gains on the
disposal of property in the UK. Further details are given in note 4.
Taxation
The effective tax rate before exceptional items was 29% which is in line with
the previous full year.
Directors
Mr Mike Smith, non-executive director, will retire from the board on 31st May
2008. Mr Simon Heale joined the board as non-executive director on 1st January
2008.
Outlook
The outlook for the full year remains positive, despite rising raw material
costs and the weak dollar.
In the Group's largest market, Nigeria, the continued political stability and
improving economic prospects give cause for optimism.
In the UK, the Group's second biggest market, good performance is expected to
continue despite some signs of reduced consumer spending power.
The acquisition of The Sanctuary brand and spa provides further opportunities to
strengthen our leading position in the UK.
The Group's balance sheet remains strong with only a small net debt position
following the Sanctuary acquisition.
Overall performance since the period end has been in line with expectations.
Principal risks and uncertainties facing the Group
Our principal risks and uncertainties for the remaining six months of the
financial year remain as stated on page 27 of our 2007 Annual Report which is
available on our website at www.pzcussons.com.
Consolidated Income Statement
Unaudited Unaudited Audited
------------------------ --------- ---------------------
Before Excep- Before Excep-
excep- tional Half-year Half-year Excep- tional
tional items to 30th to 30th tional items Year
items (note 4) Nov- Nov- items (note 4) to 31st
ember ember May
2007 2006 2007
Total Total Total
Note £m £m £m £m £m £m £m
-------- -------- ------- -------- ------- ------- ------
Continuing
operations
Revenue 3 299.5 - 299.5 279.8 577.9 - 577.9
Cost of sales (182.8) - (182.8) (171.7) (365.9) - (365.9)
-------- -------- ------- -------- ------- ------- ------
Gross profit 116.7 - 116.7 108.1 212.0 - 212.0
Selling and
distribution
expenses (54.7) - (54.7) (47.8) (86.1) - (86.1)
Administrative (30.8) 2.9 (27.9) (31.3) (58.9) (0.4) (59.3)
expenses
Share of 0.8 - 0.8 - (0.8) - (0.8)
results of -------- -------- ------- -------- ------- ------- ------
joint venture
Operating 3 32.0 2.9 34.9 29.0 66.2 (0.4) 65.8
profit -------- -------- ------- -------- ------- ------- ------
Finance income 1.5 - 1.5 1.8 2.8 - 2.8
Finance costs (1.0) - (1.0) (0.6) (0.7) - (0.7)
-------- -------- ------- -------- ------- ------- ------
Net finance 5 0.5 - 0.5 1.2 2.1 - 2.1
income -------- -------- ------- -------- ------- ------- ------
Profit before 32.5 2.9 35.4 30.2 68.3 (0.4) 67.9
taxation
Taxation 7 (9.4) (0.2) (9.6) (9.0) (19.8) 1.3 (18.5)
-------- -------- ------- -------- ------- ------- ------
Profit for the 23.1 2.7 25.8 21.2 48.5 0.9 49.4
period -------- -------- ------- -------- ------- ------- ------
Attributable
to:
Equity holders 19.9 2.7 22.6 17.7 41.5 0.9 42.4
of the parent
Minority 3.2 - 3.2 3.5 7.0 - 7.0
interests -------- -------- ------- -------- ------- ------- ------
23.1 2.7 25.8 21.2 48.5 0.9 49.4
-------- -------- ------- -------- ------- ------- ------
Basic EPS (p) 9 5.33 4.17 9.99
Diluted EPS (p) 9 5.27 4.13 9.89
-------- -------- ------- -------- ------- ------- ------
Adjusted basic 9 4.69 4.17 9.78
EPS (p)
Adjusted 9 4.64 4.13 9.68
diluted EPS ----- -------- -------- ------- -------- ------- ------- ------
(p)
There were no exceptional items in the period ended 30th November 2006.
Consolidated Balance Sheet
Unaudited Unaudited Audited
30th 30th 31st
November November May
2007 2006 2007
£m £m £m
---------- ---------- ----------
Assets
Non-current assets
Goodwill and other intangible assets 55.0 53.9 54.2
Property, plant and equipment 147.7 137.1 143.2
Investments in joint ventures (0.3) - (1.7)
Other investments 0.7 0.7 0.8
Receivables 0.1 0.1 0.1
Non-current assets held for sale 5.8 4.6 2.6
Retirement benefit surplus 23.1 23.4 23.1
---------- ---------- ----------
232.1 219.8 222.3
---------- ---------- ----------
Current assets
Inventories 162.9 158.9 150.4
Receivables and prepayments 119.0 105.8 98.3
Other investments 13.5 0.6 12.8
Cash and short-term deposits 44.6 52.3 53.3
Current taxation receivable 2.4 1.4 3.7
---------- ---------- ----------
342.4 319.0 318.5
---------- ---------- ----------
Total assets 574.5 538.8 540.8
Liabilities
Current liabilities
Borrowings (17.9) (16.7) (5.8)
Trade and other payables (104.0) (107.6) (95.7)
Current taxation payable (11.9) (9.8) (11.2)
Provisions (4.7) (1.0) (7.3)
---------- ---------- ----------
(138.5) (135.1) (120.0)
---------- ---------- ----------
Non-current liabilities
Borrowings - (1.0) -
Other liabilities (0.7) (3.6) (1.4)
Deferred tax liabilities (20.3) (24.4) (20.1)
Retirement benefit obligation (37.2) (30.5) (37.2)
Provisions (3.1) (8.8) (2.7)
---------- ---------- ----------
(61.3) (68.3) (61.4)
---------- ---------- ----------
Total liabilities (199.8) (203.4) (181.4)
---------- ---------- ----------
Net assets 374.7 335.4 359.4
Equity
Ordinary share capital 4.3 4.3 4.3
Capital redemption reserve 0.7 0.7 0.7
Revaluation reserve 30.5 26.3 29.6
Other reserve (3.0) (3.4) (3.0)
Currency translation reserve 6.5 (3.0) 0.9
Retained earnings 286.2 265.7 279.3
---------- ---------- ----------
Equity attributable to equity
holders of the parent 325.2 290.6 311.8
Equity minority interest 49.5 44.8 47.6
---------- ---------- ----------
Total equity 374.7 335.4 359.4
---------- ---------- ----------
Consolidated Statement of Recognised Income and Expense
Unau- Unau-
dited dited Audited
Half- Half- Year
year to year to to
30th 30th Nov 31st
November November May
2007 2006 2007
£m £m £m
------- ------- -------
Actuarial losses on defined benefit pension schemes - - (8.3)
Exchange differences on translation of foreign 6.9 (8.8) (4.0)
operations
Taxation on items taken directly to equity - - 4.1
------- ------- -------
Net income / (expense) recognised directly in equity 6.9 (8.8) (8.2)
Profit for the period 25.8 21.2 49.4
------- ------- -------
Total net income and expense recognised for the 32.7 12.4 41.2
period ------- ------- -------
Attributable to:
Equity holders of the parent 27.8 11.3 35.9
Minority interests 4.9 1.1 5.3
------- ------- -------
Consolidated Cash Flow Statement
Unau- Unau-
dited dited Audited
Half- Half- Year
year to year to to
30th 30th Nov 31st
November November May
2007 2006 2007
£m £m £m
------- ------- -------
Operating activities
Cash generated from operations 10.5 25.9 58.7
(note 10)
Taxation (6.8) (8.7) (19.3)
------- ------- -------
Net cash flow from operating 3.7 17.2 39.4
activities ------- ------- -------
Investing activities
Investment income received 1.5 2.1 3.1
Purchase of property, plant and (15.6) (12.5) (27.5)
equipment
Sale of property, plant and 6.7 2.1 12.6
equipment
Purchase of intangible assets (0.6) - -
Loans to joint venture companies - (8.7) (0.5)
Net cash balances disposed of with - - (1.0)
subsidiary undertaking
Proceeds from disposal of - - 2.5
subsidiary
Sale / (purchase) of current asset 0.6 1.6 (10.4)
investments ------- ------- -------
Net cash flow from investing (7.4) (15.4) (21.2)
activities ------- ------- -------
Financing activities
Interest paid (1.0) (0.6) (0.7)
Dividends paid to minority shareholders (2.0) (2.9) (2.3)
in subsidiary companies companies
Purchase of shares for ESOT - (0.5) (0.5)
(Employee Share Option Trust)
Ordinary dividends paid (13.9) (12.5) (16.7)
Net (decrease) / increase in (0.6) 4.0 (1.9)
short-term borrowings
------- ------- -------
Net cash flow from financing (17.5) (12.5) (22.1)
activities ------- ------- -------
Net decrease in cash and cash (21.2) (10.7) (3.9)
equivalents
Cash and cash equivalents at the 50.1 53.9 53.9
beginning of the period
Effect of foreign exchange rates (0.3) (0.4) 0.1
------- ------- -------
Cash and cash equivalents at the 28.6 42.8 50.1
end of the period ------- ------- -------
Notes
1. Basis of preparation
These interim financial statements for the period ended 30th November 2007,
which are neither audited nor reviewed by the auditors, have been prepared in
accordance with the Disclosure and Transparency Rules (DTR) of the Financial
Services Authority and with IAS 34, 'Interim financial reporting' as adopted by
the European Union (EU). The interim financial statements should be read in
conjunction with the annual financial statements for the year ended 31st May
2007, which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted for use in the European Union (EU),
including International Accounting Standards (IAS) and interpretations issued by
the International Financial Reporting Interpretations Committee (IFRIC).
The interim financial statements for the period ended 30th November 2007 do not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985.
The financial information set out in this statement relating to the year ended
31st May 2007 does not constitute statutory accounts for that period. Full
audited accounts of the PZ Cussons Group in respect of that financial period in
accordance with IFRS, which received an unqualified audit opinion and did not
contain a statement under either Section 237(2) or (3) of the Companies Act
1985, have been delivered to the Registrar of Companies.
2. Accounting policies
The accounting policies adopted are consistent with those adopted in the
preparation of the annual financial statements for the year ended 31st May 2007
as described in the financial statements.
The Group has considered all amendments to current standards and
interpretations, together with all new standards and interpretations and has not
identified any significant changes relevant to these accounts.
In respect of accounting for pension assets and liabilities the balances,
assumptions and asset values used are the same as those adopted at 31st May
2007.
3. Segmental analysis
The Group's primary segment reporting is by geographic sector with business
sector reporting being the secondary segment. The Group has three geographical
sectors which are based on the location of customers and consist of Africa, Asia
and Europe. The Group has one main business sector, being toiletries and
household products.
Geographic segments (unaudited)
6 months to 30th November 2007 Africa Asia Europe Eliminations Total
£m £m £m £m £m
---------------------------- ------ ------ ------- --------- ------
Total gross segment revenue 131.3 65.0 193.1 (89.9) 299.5
Inter segment revenue - (10.6) (79.3) 89.9 -
---------------------------- ------ ------ ------- --------- ------
Revenue 131.3 54.4 113.8 - 299.5
---------------------------- ------ ------ ------- --------- ------
Segmental operating profit before 11.4 4.8 15.8 - 32.0
exceptional items
Exceptional items (note 4) - - 2.9 - 2.9
---------------------------- ------ ------ ------- --------- ------
Segmental operating profit 11.4 4.8 18.7 - 34.9
---------------------------- ------ ------ ------- --------- ------
6 months to 30th November 2006
---------------------------- ------ ------ ------- --------- ------
Total gross segment revenue 111.4 62.4 191.6 (85.6) 279.8
Inter segment revenue - (7.6) (78.0) 85.6 -
---------------------------- ------ ------ ------- --------- ------
Revenue 111.4 54.8 113.6 - 279.8
---------------------------- ------ ------ ------- --------- ------
Segmental operating profit 9.8 4.3 14.9 - 29.0
---------------------------- ------ ------ ------- --------- ------
4. Exceptional items
Period to 30th November 2007
(i) Profit on disposal of property, plant and equipment
During the period the sale of the UK manufacturing site in Manchester resulted
in an exceptional gain on disposal of £2.9 million.
Period to 30th November 2006
There were no exceptional items in the period ended 30th November 2006.
Year to 31st May 2007
(i) Restructuring of UK operations
During the period a significant restructuring of the UK business made up of
redundancy and other associated restructuring costs gave rise to an exceptional
pre tax charge of £5.1 million.
(ii) Profit on disposal of property, plant and equipment
During the period the sale of the Polish head office in Warsaw resulted in an
exceptional gain on disposal of £5.2 million, while a net loss of £0.5 million
was realised in relation to the sale of the Cameroun business, due to
rationalisation of the Group's smaller operations.
5. Net finance income
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
£m £m £m
----------------------------------- ----------- ---------- ---------
Current asset investment income:
Net investment gains - - 0.1
Interest and dividends receivable 1.5 1.8 2.7
----------------------------------- ----------- ---------- ---------
1.5 1.8 2.8
Interest payable on bank loans and (1.0) (0.6) (0.7)
overdrafts
----------------------------------- ----------- ---------- ---------
0.5 1.2 2.1
----------------------------------- ----------- ---------- ---------
6. Capital expenditure
During the 6 months ended 30th November 2007 the Group acquired capital
equipment amounting to £15.8 million (H1 2006: £12.2 million) and disposed of
capital equipment with a net book value of £3.1 million (H1 2006: £4.2 million).
7. Taxation
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
£m £m £m
---------------------------- ----------- ---------- ---------
United Kingdom 4.4 2.9 6.4
Overseas 5.2 6.1 12.1
---------------------------- ----------- ---------- ---------
9.6 9.0 18.5
---------------------------- ----------- ---------- ---------
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The estimated average annual tax rate used for the year to 31st May 2008 is 29%
(the estimated tax rate for the first half to 30th November 2007 was 29%).
8. Dividends
An interim dividend of 1.075p per share for the half-year to 30th November 2007
(H1 2006: 1.000p) has been declared totalling £4.6 million (H1 2006: £4.2
million) payable on 7th April 2008 to ordinary shareholders on the register on
29th February 2008. This interim dividend has not been recognised in this half
yearly report. The proposed final dividend for the year ended 31st May 2007 of
3.27p per share, totalling £13.9 million, was approved by shareholders at the
annual general meeting of the company and paid on 26th September 2007.
9. Earnings per share
Basic earnings per share and diluted earnings per share are calculated by
dividing profit for the period, after payment of any preference dividends, by
the following weighted average number of shares in issue:
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
------------------------------ ------------ ------------- -----------
Basic weighted average (000) 424,348 424,810 424,348
------------------------------ ------------ ------------- -----------
Diluted weighted average (000) 428,725 428,720 428,725
------------------------------ ------------ ------------- -----------
The difference between the basic and diluted weighted average number of shares
represents the dilutive effect of the deferred annual share bonus scheme and the
executive share option scheme.
The basic and diluted earnings per share for the period are as follows:
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
------------------------------ ------------ ------------- -----------
Basic earnings per share:
- Adjusted basic earnings per 4.69p 4.17p 9.78p
share
- Exceptional items 0.64p - 0.21p
------------------------------ ------------ ------------- -----------
- Basic earnings per share 5.33p 4.17p 9.99p
------------------------------ ------------ ------------- -----------
Diluted earnings per share:
- Adjusted diluted earnings 4.64p 4.13p 9.68p
per share
- Exceptional items 0.63p - 0.21p
------------------------------ ------------ ------------- -----------
- Diluted earnings per share 5.27p 4.13p 9.89p
------------------------------ ------------ ------------- -----------
10. Reconciliation of operating profit to net cash generated from operating
activities
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
£m £m £m
--------------------------------------------- -------- -------- -------
Profit before taxation 35.4 30.2 67.9
Adjustment for finance income (0.5) (1.2) (2.1)
--------------------------------------------- -------- -------- -------
Operating profit 34.9 29.0 65.8
Depreciation and adjustments on disposals 4.1 6.5 7.3
Loss on sale of termination of operation - - 0.5
Share of result from joint ventures (0.8) - 0.8
Add back charge for shares purchased for ESOT - - 0.4
--------------------------------------------- -------- -------- -------
Operating cash flows before movements in 38.2 35.5 74.8
working capital
Movements in working capital:
Inventories (9.5) (21.9) (12.6)
Receivables (18.8) (11.9) (11.0)
Payables 2.9 24.0 7.2
Provisions (2.3) 0.2 0.3
--------------------------------------------- -------- -------- -------
Cash generated from operations 10.5 25.9 58.7
--------------------------------------------- -------- -------- -------
11. Condensed reconciliation of movement in consolidated equity
Unaudited Unaudited Audited
Half-year to Half-year to Year to
30th November 30th November 31st May
2007 2006 2007
£m £m £m
--------------------------------------------- -------- -------- -------
Total net income recognised for the period 32.7 12.4 41.2
Ordinary dividends (13.9) (12.5) (16.7)
Shares purchased for ESOT - - (0.5) (0.5)
Shares to be awarded from ESOT - - 0.4
Share-based payments - - (0.1)
Minority interest dividend charged (3.5) (2.4) (3.3)
--------------------------------------------- -------- -------- -------
Net increase / (decrease) in equity for the 15.3 (3.0) 21.0
period
Opening equity 359.4 338.4 338.4
--------------------------------------------- -------- -------- -------
Closing equity 374.7 335.4 359.4
--------------------------------------------- -------- -------- -------
Attributable to:
Equity shareholders of the parent 325.2 290.6 311.8
Minority interests 49.5 44.8 47.6
--------------------------------------------- -------- -------- -------
12. Related party transactions
The following related party transactions were entered into by subsidiary
companies during the year under the terms of a joint venture agreement with
Glanbia Plc:
At 30th November 2007 the outstanding balance receivable from Milk Ventures (UK)
Ltd was £12.8 million (31st May 2007: £13.3 million). At 30th November 2007 the
outstanding balance payable to Milk Ventures (UK) Ltd was £0.1 million (31st May
2007: nil).
The Group sourced and then sold fixed assets and raw materials to Nutricima Ltd
to the value of £23.1 million (31st May 2007: £30.7 million). At 30th November
2007 the amount outstanding from Nutricima Ltd was £5.4 million (31st May 2007:
£2.8 million).
Nutricima Ltd sold £23.0 million (31st May 2007: £34.9 million) of goods to PZ
Cussons Nigeria Plc. The amount outstanding from PZ Cussons Nigeria Plc at 30th
November 2007 was £4.5 million (31st May 2007: £3.5 million).
All trading balances will be settled in cash.
There were no provisions for doubtful related party receivables at 30th November
2007 (H1 2006: nil) and no charge to the income statement in respect of doubtful
related party receivables (H1 2006: nil).
13. Post balance sheet event
On 29th January 2008, PZ Cussons Plc completed the acquisition of The Sanctuary
Spa Holdings Limited, a distributor of body care products and provider of health
and leisure services based in London. The total consideration of the acquisition
was £75 million (excluding costs) on a cash and debt free basis.
Due to the recent completion of the acquisition, the detailed analysis of the
fair values of the significant assets and liabilities assumed will be published
in the Annual Report for the year ending 31st May 2008.
Statement of Directors' Responsibilities
The Directors' confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union, and that
the interim management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The Directors of PZ Cussons Plc are listed in the PZ Cussons Plc Annual Report
for 31st May 2007, with the exception of Mr S J N Heale who was appointed on 1st
January 2008.
By order of the Board
Brandon Leigh
Finance Director
29th January 2008
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 14th May 2024
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