RNS Number:3054H
PZ CUSSONS PLC
11 February 2003
PZ CUSSONS PLC
INTERIM ANNOUNCEMENT
Highlights
* Turnover and operating profitability have improved in all
three regions
* Operating profits increased by 18.3% to #25.1m from #21.2m
* Net investment losses suffered of #3.9m, against income of
#1.3m, as a result of the decline in value of the investment
portfolio
* Pre-tax profits decreased by 5.7% to #21.2m, down from #22.5m
* Diluted earnings per share decreased by 4.9% to 29.3p from
30.8p
* Net funds declined to #62.2m from #103.4m at 31st May 2002,
with #10.8m being spent on the share buy back programme, #11.3m on
the purchase of Original Source and significant investment in
factory production capacity and working capital, particularly in
Nigeria and Indonesia
* The interim dividend has been raised by 7.1% to 7.50p per
share from 7.00p
Europe
Turnover and profitability have improved in the UK. The successful
development of the Imperial Leather brand continued with the launch
of the new Bathtime range. The brand received extensive media
support during the period with the highlight of the sponsorship of
the very successful Manchester Commonwealth Games.
In late September the Original Source brand was purchased and sales
to date have exceeded expectations.
Poland continues to be a difficult market however considerable
progress has been achieved in strengthening the management of the
marketing and sales functions and in relaunching the major brands E
(detergents), Luksja (soaps), Makler and Graphite (men's) and Kwiaty
Polskie (skin care).
Greece performed strongly with sales and profits up on last year,
largely as a result of growth in the olive oil brands, Minerva and
Horio.
Africa
Sales and profits moved strongly forward in Nigeria. The programme
of improving and expanding existing factories and investing in new
product capacity is enabling the subsidiary to meet increasing
consumer demand and grow. Projects to manufacture white detergent
powder and a feminine hygiene range are now largely complete and
should be operational in the next few months. The investment in the
factories and in stocks has necessitated a significant increase in
local borrowings to fund the various new initiatives.
The results for Ghana and Kenya are similar to last year. The sale
of a non-operational property in Cameroun resulted in a profit of
#1.8m.
Asia
The region continued to achieve significant growth and profits
increased, although at a lower rate than last year, with margins
reducing as a result of large increases in raw material prices.
The expansion programme in Indonesia has resulted in greater factory
capacity and considerable progress with the strategy to increase
distribution and to introduce new extensions to the successful brand
ranges.
Thailand and Australia achieved strong sales growth, Middle East
maintained profitability in a difficult market and China continued
to incur losses, although at a somewhat lower level than in 2001.
Investments
As indicated in the 2002 accounts, the overall fall in world stock
markets impacted significantly in the first half-year and resulted
in losses of #3.7m on the portfolio. The value of the listed equity
portfolio has been reduced to #10.8m at 30th November from #25.5m at
31st May.
Purchase of own shares
The company has continued to purchase its own shares in the market
with the objective of improving earnings per share. In the six
months to 30th November 2002, 250,000 ordinary and 1,175,000 'A'
ordinary shares were purchased at a total cost of #10.8m.
Directors
Mr A Kanellis will be joining the board of PZ Cussons Plc on 1st
June 2003 as Regional Director Pacific. Mr Kanellis joined PZ
Cussons in 1993 and in recent years has been managing director of
our rapidly expanding Indonesian subsidiary.
Other matters
A Deferred Annual Share Bonus Scheme was introduced on 1st June 2000
for main board executive directors (excluding the chairman) and
certain key subsidiary directors. Consideration is now being given
to the adoption of a Long Term Share Option Scheme.
The current memorandum and articles were produced some years ago and
a review is now being carried out to bring them in line with current
practice.
It is intended to write to shareholders with details of the above,
seeking their approval at an extraordinary general meeting to be
held in late April or early May.
Dividends
An interim dividend of 7.50p per share for the half-year to 30th
November 2002 (2001 - 7.00p) has been declared, payable on 7th April
2003 to ordinary and 'A' ordinary shareholders on the register on
7th March 2003.
#000 #000
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Profit for the period 12,866
Dividends:
Preference shares
7% cumulative (29)
10% cumulative (356)
-----------------------------------------------------------------------
(385)
Ordinary and 'A' ordinary shares
Interim at 7.50p (3,083)
Adjustment for May 2002 proposed final at 19.25p
on cancelled shares 132
-----------------------------------------------------------------------
Profit retained 9,530
=======================================================================
Outlook
PZ Cussons' focus continues to be to improve operating profitability
and to pursue growth in all units, in particular the UK, Nigeria and
Indonesia.
The balance sheet remains strong, giving the group adequate funds to
finance planned opportunities for growth and to have the flexibility
to continue to purchase its own shares.
In the first half-year operating profit improvement was restricted
by the strength of sterling against the dollar and the naira and
also by increases of #3m in annual insurance premiums. These
factors will also impact on the second half, although trading
operations continue to perform strongly.
11th February 2003
PZ CUSSONS PLC
Consolidated profit and loss account
Half-year Half-year Year to
30th November 30th November 31st May
2002 2001 2002
#000 #000 #000
Turnover 233,802 212,798 440,720
-------------------------------------------------------------------------------------
Operating profit 25,135 21,242 46,794
Net investment income /
interest payable (3,888) 1,285 2,380
-------------------------------------------------------------------------------------
Profit before taxation 21,247 22,527 49,174
Taxation
United Kingdom (1,900) (2,943) (5,282)
Overseas (5,109) (4,288) (11,003)
-------------------------------------------------------------------------------------
(7,009) (7,231) (16,285)
-------------------------------------------------------------------------------------
Profit after taxation 14,238 15,296 32,889
Equity minority
interests (1,372) (1,339) (3,794)
-------------------------------------------------------------------------------------
Profit attributable to
members of the company 12,866 13,957 29,095
Dividends (3,336) (3,015) (11,610)
-------------------------------------------------------------------------------------
Profit for the period
retained 9,530 10,942 17,485
=====================================================================================
Basic earnings per
ordinary and 'A'
ordinary share of 10p 29.57p 30.98p 65.50p
Diluted earnings per
ordinary and 'A'
ordinary share of 10p 29.30p 30.80p 65.09p
Dividend per ordinary
and 'A' ordinary
share of 10p 7.50p 7.00p 26.25p
PZ CUSSONS PLC
Consolidated balance sheet
30th November 30th November 31st May
2002 2001 2002
#000 #000 #000
--------------------------------------------------------------------------------
Fixed assets
Intangible assets:
Goodwill 961 497 988
Negative goodwill (2,323) (2,454) (2,388)
--------------------------------------------------------------------------------
(1,362) (1,957) (1,400)
Other intangible fixed assets 10,537 - -
Tangible assets 146,112 159,589 158,821
Investments 1,022 542 -
--------------------------------------------------------------------------------
156,309 158,174 157,421
--------------------------------------------------------------------------------
Current assets
Stocks 129,715 109,245 118,956
Debtors due within one year 62,471 54,994 50,810
Debtors due after one year 7,890 8,083 8,220
Investments 80,303 103,488 106,757
Cash at bank and in hand 14,229 9,187 10,975
--------------------------------------------------------------------------------
294,608 284,997 295,718
Creditors (due within one year)
Bank loans and overdrafts (32,349) (15,529) (14,322)
Others (100,425) (93,060) (98,551)
--------------------------------------------------------------------------------
(132,774) (108,589) (112,873)
--------------------------------------------------------------------------------
Net current assets 161,834 176,408 182,845
--------------------------------------------------------------------------------
Total assets less current liabilities 318,143 334,582 340,266
Creditors (due after one year) (17,826) (18,921) (19,578)
Provisions for liabilities and charges (14,991) (14,872) (15,846)
--------------------------------------------------------------------------------
Net assets 285,326 300,789 304,842
================================================================================
Capital and reserves
Equity ordinary share capital 4,150 4,309 4,293
Non-equity preference share capital 7,898 7,898 7,898
--------------------------------------------------------------------------------
Total called up share capital 12,048 12,207 12,191
Reserves attributable to equity
interests 233,987 243,372 248,927
--------------------------------------------------------------------------------
Total shareholders' funds 246,035 255,579 261,118
Equity minority interests 39,291 45,210 43,724
--------------------------------------------------------------------------------
285,326 300,789 304,842
================================================================================
PZ CUSSONS PLC
Group cash flow statement
Half-year Half-year Year to
30th November 30th November 31st May
2002 2001 2002
#000 #000 #000
------------------------------------------------------------------------------------------------
Cash flow from operating activities 8,672 6,156 35,036
Returns on investments and servicing of
finance (4,939) 577 (545)
Taxation (7,116) (5,320) (16,026)
Capital expenditure and financial
investment (16,880) (5,178) (11,720)
Acquisitions and disposals - (708) (708)
Equity dividends paid (8,080) (7,479) (10,464)
------------------------------------------------------------------------------------------------
Cash outflow before use of liquid
resources and financing (28,343) (11,952) (4,427)
Management of liquid resources 23,540 27,937 24,060
Financing (4,506) (11,221) (19,106)
------------------------------------------------------------------------------------------------
(Decrease) / increase in cash in the
period (9,309) 4,764 527
================================================================================================
Reconciliation of net cash flow to
movement in net funds
(Decrease) / increase in cash in the
period (9,309) 4,764 527
Cash (inflow) / outflow from financing (6,294) (552) 6,162
Cash inflow from management of liquid
resources (23,540) (27,937) (24,060)
------------------------------------------------------------------------------------------------
Change in net funds resulting from cash
flows (39,143) (23,725) (17,371)
Currency retranslation (2,084) 10 (80)
------------------------------------------------------------------------------------------------
Movement in net funds in the period (41,227) (23,715) (17,451)
Opening net funds 103,410 120,861 120,861
Closing net funds 62,183 97,146 103,410
================================================================================================
Reconciliation of operating profit to
operating cash flows
Operating profit 25,135 21,242 46,794
Amortisation of goodwill and other
intangible assets 95 (51) (81)
Depreciation and adjustments on
disposals 8,373 8,779 16,263
Provisions 369 (190) 529
Stocks (23,160) (16,457) (29,418)
Debtors (12,888) (2,301) 2,500
Creditors 10,748 (4,866) (1,551)
------------------------------------------------------------------------------------------------
Net cash flow from operating activities 8,672 6,156 35,036
================================================================================================
PZ CUSSONS PLC
Group cash flow statement continued
Analysis of net funds
At 31st At 30th
May Cash Exchange November
2002 flow difference 2002
#000 #000 #000 #000
-------------------------------------------------------------------------------------
Cash in hand and at bank 10,975 3,944 (690) 14,229
Overdrafts (10,368) (13,253) 1,337 (22,284)
-------------------------------------------------------------------------------------
(9,309)
Loans due within one year (3,954) (6,294) 183 (10,065)
Deposits 80,387 (8,157) (2,880) 69,350
Other current asset investments 26,370 (15,383) (34) 10,953
-------------------------------------------------------------------------------------
(23,540)
-------------------------------------------------------------------------------------
103,410 (39,143) (2,084) 62,183
=====================================================================================
Statement of total recognised gains and losses
Half-year Half-year Year to
30th November 30th November 31st May
2002 2001 2002
#000 #000 #000
------------------------------------------------------------------------------------------------
Profit for the period 12,866 13,957 29,095
Currency retranslation (13,813) 465 554
Deficit on revaluation - (5,010) (4,932)
------------------------------------------------------------------------------------------------
Total recognised gains and losses
relating to the period (947) 9,412 24,717
================================================================================================
Reconciliation of movement in shareholders' funds
Half-year Half-year Year to
30th November 30th November 31st May
2002 2001 2002
#000 #000 #000
------------------------------------------------------------------------------------------------
Total recognised gains and losses
relating to the period (947) 9,412 24,717
Dividends (3,336) (3,015) (11,610)
Purchase of own shares (10,800) (11,773) (12,944)
------------------------------------------------------------------------------------------------
Net (decrease) / increase in
shareholders' funds (15,083) (5,376) 163
Opening shareholders' funds 261,118 260,955 260,955
------------------------------------------------------------------------------------------------
Closing shareholders' funds 246,035 255,579 261,118
================================================================================================
PZ CUSSONS PLC
Note
The half-year figures are unaudited. The figures for the year ended
31st May 2002 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.
Enquires 11th February 2003
PZ Cussons Plc
0161 491 8000 Graham Calder
(Between 9.00 am and 5.15 pm) Finance Director
Weber Shandwick / Square Mile Terry Garrett / Josh Royston
020 7067 0000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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