Final Results

McBride PLC 09 September 2004 9 September 2004 McBRIDE PLC Preliminary Announcement for the year ended 30 June 2004 McBride supplies over 20 million Private Label household and personal care products each week to Europe's leading retailers. Highlights of the full year are as follows: • Group turnover was £501.3 million, up 3.0% on last year • Group operating profit was £30.4 million, up £0.7 million (2.4%) • Group operating profit was £35.1 million, up £4.0 million (12.9%), before £3.3 million exceptional item* and £1.4 million goodwill • Profit before tax was £33.5 million, up £7.3 million (27.9%), before £3.3 million exceptional item* • Net debt reduced £29.7 million to £31.4 million at 30 June 2004 • Basic Earnings Per Share increased 1.2p (11.8%) to 11.4p, excluding goodwill and exceptional item*, it was 13.5p, up 2.5p (22.7%) • Final dividend proposed of 2.8p, up 33.3%, making a total of 4.0p, up 37.9% • After the year end the Group acquired the remaining equity interests in Aerosol Products Limited, from its joint venture partners • The Board will request approval at the AGM to repurchase up to 10% of its issued ordinary share capital * relates to a factory closure in Breda, The Netherlands Mike Handley, Chief Executive, commented: 'These results again demonstrate the continuing strength of McBride. Whilst market conditions remain competitive, sales gains in Continental Europe and continuing operational improvements across the Group have improved profitability. Cashflow is strong and a substantial reduction in debt has again been achieved. Since the year end, trading has been satisfactory.' For further information please contact: McBride plc Mike Handley, Chief Executive 01494 60 70 50 Miles Roberts, Finance Director Financial Dynamics 020 7831 3113 Andrew Dowler Overview • Sales to Continental Europe continued to grow strongly, up 5.8% to £286.7 million. Operating profits, excluding £3.3 million exceptionals, improved 27.9% to £16.5 million. • Sales to UK reduced 0.8% to £210.5 million reflecting some price deflation offset by volume growth. Operating profits however grew 2.4% to £17.2 million due to the ongoing focus on cost efficiencies and working capital management. • To improve overall capacity utilisation and operating efficiency, the factory in Breda, The Netherlands is being closed with production transferring to other plants. There is a £3.3 million operating exceptional item for closure costs. Strategy The Group has continued to build on the excellent progress achieved during the last 3 years delivering further sales and profit growth. This is especially pleasing in a year when the industry has experienced more than its usual competitive pressures. Our commitment to innovative solutions across all facets of the business has again ensured success. The strength of our business emanates from the consistency and relevance of our strategy: focus on Private Label household and personal care, innovate, support and develop with our major customers, emphasis on customer service and maintaining industry leading management skills and experience. All elements of the strategy have contributed to this year's strong performance. Dividend McBride plc is committed to making progressive, sustainable increases to the dividend, taking account of the medium-term requirements of the business. Accordingly the Board is recommending a final dividend of 2.8p per share to be paid on 26 November 2004. The total dividend will be 4.0p per share, a 37.9% increase over last year. Share Repurchase In addition to the increased dividend, the Board is seeking approval from Shareholders to buy back up to 10% of the share capital of the Company. This will avoid the risk of any dilution in earnings per share as a result of the exercising of employee share options. Board The Company has undertaken a thorough review of all aspects of Corporate Governance including the recent changes to the UK Combined Code. The membership of the Board and Board Committees and their terms of reference have been comprehensively reviewed and updated where necessary. The contractual notice period for all executive directors has been amended to 1 year. All non-executives will be subject to annual re-election by shareholders at the AGM whilst the executive directors will be subject to re-election at 2 yearly intervals Aerosol Products Limited (APL) Following substantial operational and financial restructuring in June 2002, APL has improved its financial performance. The Group's share of APL's pre-tax profit was £0.5 million (2003: £0.1million). On 6th September 2004 the Group acquired the entire equity interests of its joint venture partners in APL for a consideration of £1.0 million. In addition, the June 2002 restructuring deferred £2.0 million of consideration until July 2005; this payment has been brought forward to 6th September 2004. Outlook These results again demonstrate the continuing strength of McBride. Whilst market conditions remain competitive, sales gains in Continental Europe and continuing operational improvements across the Group have improved profitability. Cashflow is strong and a substantial reduction in debt has again been achieved. Since the year end, trading has been satisfactory. Overview of Performance It is pleasing to report another year of growth in sales, profits and cash generation resulting in the Group's net debt falling by almost 50% to £31.4 million. The focus on exploiting the growth of Private Labels in the recently enlarged EU market, maintaining private label leadership in the UK, and improving our operational cost base have all contributed to this excellent performance. These results are particularly pleasing against the background of intense retail competition and price focus in all markets. Overall sales for the Group were £501.3 million compared with £486.8 million for the previous year which have been restated in line with FRS 5. Sales growth of 3.0% was driven by our Continental European business, which reported local sales of over €400 million for the first time. The strong performance of our Continental European business now means that sales outside the UK account for 58% of Group turnover. This growth was underpinned once again by a good performance in France assisted by strong growth from our Italian business. McBride is also expanding its sales in both the Nordic countries and the large German Private Label market, where it has a sales office. It is also pleasing that the investments made in our manufacturing facility in Poland since it was acquired in 1998, combined with our existing facilities throughout the Group, have improved McBride's ability to compete effectively in terms of quality and price into these markets, and the accession countries of Central Europe. UK sales by destination at £210.5 million were broadly in line with last year's £212.1 million reflecting real volume growth offset by selling price deflation. At £35.1million, the Group's operating profit, before £1.4 million goodwill amortisation and £3.3 million exceptional item, was up 12.9%. The Group's continuing focus on variable and fixed costs led to improved operational effectiveness and asset utilisation enabling McBride to counteract adverse pressures on selling prices. The record sales of our European business also underpinned its operating profit of £16.5 million (excluding £3.3 million exceptional item) from £12.9 million last year, an increase of 27.9 %. One of the most significant achievements of the Group's performance since December 2000 has been cash generation and the dramatic lowering of net debt. This has been achieved by focus on cash management and teamwork throughout the business. Interest charges have been reduced significantly by improved treasury management and the lower level of debt, which stood at £31.4 million at June 2004 compared with £61.1 million in June 2003. Capital expenditure increased to £17.3 million (2003: £10.6 million) with investments following the closure of the Estaimpuis Industrial and Institutional factory and its conversion to a household facility, the closure of the Breda factory in The Netherlands and expenditure at Ieper and Estaimpuis to facilitate the transfer of its production, plus tablet capacity expansion in Barrow and Moyaux. Private Label increased its market share in six of the seven core European markets according to The PLMA's (Private Label Manufacturers Association) 2004 International Private Label Yearbook. The UK is still the largest market in Europe for Private Label with over 40% volume share across all grocery categories. A separate review of the Nordic markets showed Private Label gains in all countries. The key factors that are influencing Private Label growth include retailer concentration and expansion across borders, the growth of the hard discount format and the expansion of the full service hypermarket across Europe. The new accession countries of Central and Eastern Europe, Poland, Czech Republic and Hungary are among the fastest growing Private Label markets according to AC Neilsen. The enlargement of the EU on May 1st 2004 added 75 million new consumers in the accession countries to the existing 378 million consumers providing exciting opportunities for McBride to support Private Label growth. McBride regards this enlarged market as an exciting opportunity to support its major customers as they develop and expand their retail estates In the more mature UK market consumers are still attracted to the quality and value proposition of Private Label. Volume sales and market share across many categories continues to grow although price competitiveness among retailers and its deflationary effect has caused some loss of value share in many sectors. Overall Private Label remains a growth sector of the European retail grocery market and those categories like household and personal care have even more development potential in the longer term because the Private Label share of these categories lags behind the all commodity share in the vast majority of countries. UK The recently restructured UK retail grocery market continues to be very competitive as the top 4 retailers compete for market share. As a number of major retailers have entered and are developing the growing convenience sector, the availability of their Private Label ranges is expanding to more consumers. Whilst the household Private Label share lags behind the all commodity share its volume share reached 34% in May 2004 which means UK consumers buy the Private Label option in 1 in every 3 purchases. The shelf price deflation referred to above, however, resulted in a slight value share reduction from 23.6% to 23.2%. Both laundry products and machine dish wash enjoyed between 1% and 2% volume growth and in the latter category Private Label now accounts for more than half of all sales in the UK. In laundry and household cleaner new product development, McBride continues to lead the field; successfully launching a new laundry sachet concept with unique tamper evident packaging, fruit extract based cleaners as well as a new dishwashing spray incorporating McBride's powerblaster formulation. Keeping pace with the changing retail environment our Clean 'n Fresh range of household and laundry products was successfully launched into the independent convenience sector resulting in an 11.3% sales uplift in the year. Another first for McBride UK, was the use of regional TV advertising for the Surcare Sensitive range of laundry products. In the UK 75% of women believe they have sensitive skin and Surcare is the strongest brand in this niche sector. Sales of Surcare in 2003/04 were up 25% on the previous year and the range was extended into personal care The UK personal care business had another successful year growing sales and profits in the face of continuing competitive pressure. Initiatives with both Private Label and brand developments including the extension of Surcare resulted in a number of contract gains for the business. Continental Europe Our Continental European (McBride CE) sales are centred on the core Western European members of the EU primarily France, Spain, Italy, The Netherlands, Belgium and Germany, as well as Poland. The headquarters are based in Belgium on the French border and the production sites are in France, Belgium, Spain and Italy. The core markets display all the same competitive features as the UK with the added dimension of a much more developed hard discount sector. The dual dynamic of hard discount store openings and multiple retail consolidation has put in place all the key factors that facilitate Private Label growth i.e. big retailers, simplified fascias, centralised sourcing, distribution and range control. Against this background all commodity Private Label and in particular household and personal care continue to increase market share. In almost every European country Private Label increased its market share in the last 12 months according to research by AC Nielsen on behalf of the PLMA The CE team in McBride continues to work assiduously on broadening and deepening its relationships with Continental Europe's leading retailers. Working together to improve the Private Label offering in household and personal care products throughout Europe continues to be mutually beneficial for our retail customers and McBride. An essential part of customer focus is our commitment to maintaining its competitive cost structure and, as a result, the underperforming production units in Belgium and The Netherlands were closed in the period. McBride CE sales reached a record Euro 400 million in the year for the first time with our Belgian factory at Ieper reporting record sales of over Euro 100 million driven by the buoyancy of the Private Label market in Europe. Overall reported sales by destination in Continental Europe were £286.7 million (£271.0 million) up 5.8%, with sales in local currency up 1.7%. Intersilesia's sales were up 0.9% in local currency on the previous year resulting from the combination of a highly competitive Polish market compensated by the successful development of our Polish factory as the manufacturing hub for Central Europe. The company is successfully gaining business not only in adjacent Central European markets but also in Scandinavia and the Baltic countries. Our steady progress in building a sustainable business platform in Hungary and the Czech Republic continues with sales growth of 33% in Hungary and 17% in the Czech Republic. International - Rest of World McBride International has responsibility for all markets outside the pre May 2004 EU territories with the majority of its sales in Central & Eastern Europe, the core of which is Intersilesia in Poland. Rest of World covers all markets outside Europe. As part of our development strategy for Central and Eastern Europe, McBride it at advanced stage of opening a sales office in Moscow having recently established a local subsidiary McBride Russia Ltd to build on our existing position in the growing Russian market. Recent successes for Private Label contracts have been gained in both Denmark and Norway with further business from our Polish factory assisting the development in the region. Against the backdrop of a strong Euro and sterling it is pleasing to report that McBride International were still able to deliver an 10.8% increase in sales. Operations A key element which sets McBride apart from its peer group Private Label competitors is the quality and scale of its manufacturing asset base throughout Europe comprising a network of 15 factories, in 6 countries including the APL joint venture in the UK. This strength is becoming increasingly recognised by our customers especially given our reputation for Private Label development, speed of response and expertise in supply chain and manufacturing. During the year the closure of our Dutch factory was announced. The closure of the factory and transfer of production to more cost-effective sites within the Group was achieved without disruption to the service and products delivered to our customers. As reported in last year's Annual Report, the Industrial and Institutional products factory on the Estaimpuis site in Belgium was closed during the year and a modern household cleaner and toilet care production facility has been created in the existing buildings of the old factory. This major project was excellently and professionally managed on time and within budget. Production sites are focussed on product technologies and we have therefore have 2 laundry powder factories, 2 aerosol factories, 2 personal care factories and 9 household liquids factories. The number of household liquids sites is a direct consequence of the need to avoid the transport costs of shipping products over large distances. This year £17.3 million of capital was invested in the business compared to £10.6m in 2002-03. The increase was in part driven by the need for new capacity in areas such as PET bottles in Europe, and autodishwashing tablets but a certain proportion related to capacity additions required to enable the transfer of production from the Breda to other factories in the Group. The Group is continuing to identify areas for improving operational performance. Our continuing focus on asset utilisation, line productivity and efficiency through inter-site comparisons and benchmarks enables us to continue to attack our cost base. The Group believes it will be able to further improve throughput providing opportunities to reduce the asset base of the company whilst at all times ensuring that customer service levels are not compromised. Our information systems and collaborative working with customers and suppliers has enabled stock levels to be lowered despite increases in sales turnover and volume whilst maintaining customer service. Financial Review The continuing focus on operational efficiencies, asset utilisation and cash generation are reflected in the results for the year. Profit before tax, excluding the £3.3 million exceptional item, improved to £33.5 million ( 2003: £26.2 million), net debt reduced to £31.4 million (2003: £61.1 million) whilst the pre-tax return on average capital employed increased from 19.6% to 22.9%, and to 25.4% excluding exceptional item. This focus, particularly on underperforming assets, has resulted in the closure of the production facility based in Breda, The Netherlands. This closure which will be completed before December 2004 is in addition to shutting the Industrial and Institutional Products (I&I) factory in Belgium during the current year. Turnover improved over the previous year by £14.5 million to £501.3 million including £9.2 million relating to favourable currency movements. At constant exchange rates, turnover grew by 1%; this reflects the growth in the core Private Label business by 2.2% partly offset by lower contract manufacturing sales resulting from the closure of the unprofitable I&I business. The components of the growth in the core business were the continuing increase in Continental European sales, up 5.9%, partially offset by a decline in UK sales of 2.2%, largely the effect of price deflation. Group operating profit, before exceptional items and goodwill amortisation, improved to £35.1 million (2003: £31.1million) due to an improved Gross Profit, from higher sales, and broadly flat overheads. On a yearly average basis, the Euro appreciated 4% against Sterling from the year ending June 2003 to the year ending June 2004. The effect of this stronger Euro on the consolidated operating profit is not significant since the favourable impact of the translation into Sterling of the Continental European activities is largely offset by an adverse impact on UK operations which incurs some Euro denominated costs. The Group's net interest receivable was £1.8 million (2003: £0.6 million). This improvement mainly resulted from higher receipts from Aerosol Products Limited, the Group's joint venture, following its improved financial performance. Interest payable fell to £2.5 million ( 2003: £4.2 million) largely due to lower levels of net debt, improved borrowing margins and the benefit from the interest differential on forward contracts taken out to hedge the Group's net asset exposure against movements in certain foreign currency exchange rates. The contribution from Aerosol Products Limited improved to £0.5 million (2003 £0.1 million). The taxation charge for the year of £9.9 million equates to a 31.8% effective tax rate based on profit before tax excluding goodwill and the joint venture contribution. This rate reflects the mix of mainstream tax rates applying throughout the Group. The weighted average number of shares in issue during the year was 177,666,200. Earnings per share was 11.4p, up 11.8% on 2003 which itself had risen 46.3% on the previous year (excluding 2002 goodwill write-off). EPS, before exceptional items and goodwill amortisation, improved by 22.7% to 13.5p (2003: 11.0p). As anticipated in last year's Annual Report, capital expenditure has risen to £17.3 million (2003 restated - £10.6 million). However, the increase includes £3.5 million relating to the closure of the Breda plant; the underlying level of expenditure is in line with the average for the previous three years and remains substantially below depreciation as asset utilisation is improved. Net debt continued to reduce significantly during the year, from £61.1 million at June 2003 to £31.4 million at this year end, in spite of an increased dividend and higher capital expenditure. Net working capital levels continued to reduce reflecting the continuing improvement in stock management and better supplier payment terms partly offset by an increase in debtors. Gearing, interest cover and Net Debt / EBITDA ratios all continued to improve this year on 2003, to 34% (2003 - 78%), 43.4x (2003 - 8.3x) and 0.62 (restated 2003 - 1.13 ). To align with FRS 5 - Application note G, which was issued in November 2003, turnover is now stated net of sales discounts and rebates. Previously these were accounted for within administrative costs. Prior periods have been restated with the impact on 2003 being a £18.2 million reduction in turnover from £505.0 million to £486.8 million. There is no impact on operating profit. A further accounting policy change relates to fixed assets where ancillary moulding equipment is now accounted for as a fixed asset, having previously been treated as stock which was amortised, with the charge included in administrative costs. Prior periods have been restated with the impact on the 2003 Balance Sheet being a net tangible fixed asset increase and associated stock decrease of £2.2 million. There is no impact on operating profit. Breda Plant Closure A one-off exceptional charge of £3.3 million, relating to redundancy costs, has been included in this year's results although the payments will not be made until after June 2004. Additionally, capital expenditure of £5.0 million will be incurred, relating to the production transfer, of which £3.5 million was spent by June 2004. £1.0 million of property disposal proceeds are expected in 2005/6. International Financial Reporting Standards (IFRS) The Group is required under European legislation to prepare their consolidated financial statements in accordance with IFRS for accounting periods beginning on or after 1 January 2005. The adoption of IFRS will first apply to the Group's financial statements for the year ending 30 June 2006. A project team has been set up to achieve a smooth transition to IFRS. A high level review of the differences between IFRS and current accounting policies has been performed, and the impacts of convergence are currently being reviewed. The wider implementation aspects are also being assessed, including how changes resulting from IFRS will be communicated to the market. The key impact areas on net profit and shareholders' funds, based on the work to date, are expected to be due to differences in accounting for deferred tax, pensions, research and development, share based payments, goodwill and fixed assets. The presentation of the Group's financial statements, along with the disclosures will also be affected. Pension Accounting The Group continues to account for pensions in accordance with Statement of Accounting Practice 24 (SSAP 24). An actuarial valuation of the UK defined benefit scheme as at 31 March 2003 was undertaken in the year; this showed a deficit of £4.0 million to cover liabilities resulting from past service. Under SSAP 24 this liability will be recovered over 13 years which is the average remaining service life of the current members. The Company contribution rate for future service will not change from that incurred over the last few years. Under FRS17 rules, the valuation of the scheme at June 2004 showed gross assets amounting to £39.0 million (2003 - £32.9 million) and the liabilities to £49.0 million (2003 - £47.7 million) leaving a shortfall of £7.0 million (2003 - £10.4 million) after taxation. Some of the reasons for the difference with SSAP 24 include different valuation dates and assumptions for the discount rate used to calculate scheme liabilities. CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 30 June 2004 Post Pre exceptional Exceptional Exceptional items Restated items items total total 2004 2004 2004 2003 Note £m £m £m £m Turnover Continuing operations and share of joint 517.8 - 517.8 501.9 venture Less: share of joint venture's turnover (16.5) - (16.5) (15.1) Group turnover 2 501.3 - 501.3 486.8 Cost of sales (309.5) - (309.5) (299.9) Gross profit 191.8 - 191.8 186.9 Distribution costs (32.3) - (32.3) (31.2) Administrative costs Before goodwill amortisation (124.4) (3.3) (127.7) (124.6) Goodwill amortisation (1.4) - (1.4) (1.4) Administrative costs including goodwill (125.8) (3.3) (129.1) (126.0) amortisation Group operating profit 2 33.7 (3.3) 30.4 29.7 Share of joint venture's operating profit 0.8 - 0.8 0.5 Profit on ordinary activities before 34.5 (3.3) 31.2 30.2 interest Group interest receivable and similar 1.8 - 1.8 0.6 income Group interest payable and similar (2.5) - (2.5) (4.2) charges Share of joint venture's interest payable (0.3) - (0.3) (0.4) and similar charges Profit on ordinary activities before 33.5 (3.3) 30.2 26.2 taxation Group tax on profit on ordinary (10.9) 1.0 (9.9) (7.9) activities Profit on ordinary activities after 22.6 (2.3) 20.3 18.3 taxation Equity minority interest (0.1) - (0.1) (0.1) Profit for the year 22.5 (2.3) 20.2 18.2 Dividends proposed (7.1) - (7.1) (5.2) Retained profit for the year 15.4 (2.3) 13.1 13.0 Earnings per ordinary share (pence) Basic 11.4 10.2 Diluted 10.9 10.1 Basic before goodwill amortisation and 13.5 11.0 operating exceptional items Dividend per share (pence) 4.0 2.9 All Group results relate to continuing operations. BALANCE SHEET at 30 June 2004 Restated Group Group Company Company 2004 2003 2004 2003 £m £m £m £m Fixed assets Intangible assets 7.6 9.0 - - Tangible assets 124.6 128.3 0.1 0.1 Investments - - 164.7 165.0 Total fixed assets 132.2 137.3 164.8 165.1 Current assets Stocks 38.8 41.1 - - Debtors 114.9 114.7 43.8 15.2 Cash at bank and in hand 0.2 0.7 - - 153.9 156.5 43.8 15.2 Creditors: amounts falling due within one year (151.0) (148.4) (42.4) (8.8) Net current assets 2.9 8.1 1.4 6.4 Total assets less current liabilities 135.1 145.4 166.2 171.5 Creditors: amounts falling due after more than one year (28.1) (57.2) - (5.7) Provisions for liabilities and charges (14.1) (7.9) - - Investment in joint venture Share of gross assets 3.9 3.4 - - Share of gross liabilities (5.1) (5.1) - - Net investment in joint venture (1.2) (1.7) - - Net assets 91.7 78.6 166.2 165.8 Capital and reserves Called up share capital 17.8 17.8 17.8 17.8 Share premium account 139.4 139.3 139.4 139.3 Profit and loss account (65.5) (78.5) 9.0 8.7 Equity shareholders' funds 91.7 78.6 166.2 165.8 Equity minority interest - - - - Total shareholders funds 91.7 78.6 166.2 165.8 These financial statements were approved by the Board of Directors on 8th September 2004 and were signed on its behalf by:- M HANDLEY M W ROBERTS Directors CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 June 2004 Restated Restated 2004 2004 2003 2003 Note £m £m £m £m Net cash inflow from operating activities 3 62.4 63.0 Returns on investments and servicing of finance 1.0 (4.3) Taxation (10.6) (6.9) Operating cash flow after taxation and finance costs 52.8 51.8 Capital expenditure Cash expenditure on fixed assets (17.3) (10.6) Disposal of fixed assets 0.1 0.3 Net cash outflow on capital expenditure (17.2) (10.3) Equity dividends paid (7.3) (3.7) Cash inflow before financing 28.3 37.8 Financing (26.8) (33.7) Increase in cash in the year 1.5 4.1 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT for the year ended 30 June 2004 2004 2003 £m £m Increase in cash in the year 1.5 4.1 Cash outflow from movement in debt 26.4 33.3 Movement on finance leases 0.4 0.4 Change in net debt resulting from cash flows 28.3 37.8 Translation differences 1.4 (4.0) Movement in net debt in the year 29.7 33.8 Net debt at the beginning of the year (61.1) (94.9) Net debt at the end of the year (31.4) (61.1) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 30 June 2004 2004 2003 £m £m Profit for the financial year 20.2 18.2 Unrealised foreign currency differences (0.1) 1.2 Total recognised gains and losses 20.1 19.4 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 30 June 2004 Group Group 2004 2003 £m £m Profit for the financial year 20.2 18.2 Equity dividends (7.1) (5.2) Retained profit 13.1 13.0 Unrealised foreign currency differences (0.1) 1.2 Increase in share premium 0.1 - Opening equity shareholders' funds 78.6 64.4 Closing shareholders' funds 91.7 78.6 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 1) Exchange rates The exchange rates against sterling used for the periods were as follows: Average rate: 2004 2003 Euro 1.46 1.52 Polish Zloty 6.75 6.29 Czech Koruna 47.09 47.05 Hungarian Forint 375.9 371.0 2004 2003 Closing rate: Euro 1.49 1.44 Polish Zloty 6.70 6.44 Czech Koruna 47.45 45.39 Hungarian Forint 373.8 382.6 2) Segmental Information Restated 2004 2003 £m £m Turnover by destination is analysed by geographical area as follows UK 210.5 212.1 Continental Europe 286.7 271.0 Rest of world 4.1 3.7 Group turnover 501.3 486.8 Share of joint venture's turnover 16.5 15.1 Turnover by destination 517.8 501.9 Turnover by geographical origin is analysed as follows UK 216.6 219.4 Continental Europe 284.7 267.4 Group turnover 501.3 486.8 Share of joint venture's turnover 16.5 15.1 Turnover by origin 517.8 501.9 Turnover by class of business is analysed as follows Household products 432.0 418.7 Personal care products 69.3 68.1 Group turnover 501.3 486.8 Share of joint venture's turnover 16.5 15.1 Total turnover by class of business 517.8 501.9 2) Segmental Information continued 2004 2003 £m £m Operating profit by geographical origin is analysed as follows UK 17.2 16.8 Continental Europe - pre exceptional item 16.5 12.9 Exceptional item (3.3) - Continental Europe - post exceptional 13.2 12.9 item Group operating profit 30.4 29.7 Non-operating items 0.5 0.1 Net interest payable (0.7) (3.6) Profit on ordinary activities before tax 30.2 26.2 The UK business includes total goodwill amortisation of £1.2 million (2003 - £1.2 million) The Continental Europe business includes goodwill amortisation of £0.2 million (2003 - £0.2 million). 2004 2003 £m £m Operating profit by class of business is analysed as follows Household products - pre exceptional item 29.3 25.5 Exceptional item (3.3) - Household products - post exceptional 26.0 25.5 item Personal care products 4.4 4.2 Group operating profit 30.4 29.7 Non-operating items 0.5 0.1 Net interest payable (0.7) (3.6) Profit on ordinary activities before tax 30.2 26.2 The household products business includes goodwill amortisation of £1.4 million (2003 - £1.4 million). 2004 2003 £m £m Non-operating items consist of the following: Share of joint venture's operating profit 0.8 0.5 Share of joint venture's interest payable and similar (0.3) (0.4) charges Total non-operating items before tax 0.5 0.1 Share of joint venture's tax charge on ordinary - - activities Total non-operating items after tax 0.5 0.1 2004 2003 £m £m Net assets by geographical origin are analysed as follows: UK 60.8 68.9 Continental Europe 78.5 83.9 Total operating assets and liabilities 139.3 152.8 Non-operating liabilities (47.6) (74.2) Net assets 91.7 78.6 Non operating liabilities include cash less short and long-term borrowings, provisions for liabilities and charges and dividends. It is not possible to provide an analysis of the net assets by class of business as a number of the Group's operating sites manufacture both Private Label household and personal care products. During the year the accounting policy for the treatment of sales discounts and rebates has been amended. Prior period figures have been restated to reflect this change resulting in a revenue reduction of £18.2m for 2003. There is no impact on Group operating profit. 3) Reconciliation of operating profit to operating cashflow Pre exceptional Exceptional Post exceptional items items items Restated 2004 2004 2004 2003 £m £m £m £m Group operating profit 33.7 (3.3) 30.4 29.7 Depreciation 18.5 - 18.5 22.9 Goodwill amortisation 1.4 - 1.4 1.4 Loss on disposal of fixed assets - - - 0.1 Movement in stock 1.3 - 1.3 6.1 Movement in debtors (3.7) - (3.7) 1.4 Movement in creditors 11.2 3.3 14.5 1.4 Cashflow from operating activities 62.4 - 62.4 63.0 . Notes: 1 The financial information set out above does not constitute the company's statutory accounts for the years ended 30 June 2004 or 2003 but is derived from those accounts. Statutory accounts for 2003 have been delivered to the Registrar of Companies. Accounts for 2004 will be delivered in due course. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985 2 During the year the accounting policy for the treatment of sales discounts and rebates has been amended. Discounts and rebates have in 2004 been accounted for as a reduction in revenue, having been previously treated as an administrative cost. This accounting treatment is consistent with FRS 5 - Application Note G (issued November 2003) and in the directors' opinion more fairly reflects the nature of these transactions. 2003 figures have been restated to reflect this change resulting in a revenue reduction of £18.2 million. There is no impact on operating profit. 3 During the year the accounting policy for the treatment of ancillary moulding capital equipment has been amended. This has in the current year, been accounted for as a fixed asset, having been previously treated as stock which was amortised, with the charge included in administrative costs. In the directors' opinion this accounting treatment more fairly reflects the nature of these transactions. 2003 figures have been restated to reflect this change resulting in a tangible fixed asset increase and associated stock decrease of £2.2 million, depreciation increase of £1.0 million and capital expenditure increase of £1.8 million. There is no impact on operating profit. 4 Share of joint venture. On 5 November 1999 a joint venture, Aerosol Products Ltd was set up from the Hull site of Robert McBride Limited and the Thetford site of Nichol Beauty Products Limited. Its results are included in compliance with FRS 9 - Associates and joint ventures. 5 The Group announced on 23 April 2004 that it was closing its Breda production plant in The Netherlands and transferring those activities to other Group locations. Grada B.V., which operates from Breda will continue as a selling company. The £3.3 million pre-tax exceptional cost relates to the Breda plant closure. 6 The Annual Report for 2004 will be issued to shareholders on 27th September 2004 and will be available from the Company Secretary at the Company's Registered Office, McBride House, Penn Road, Beaconsfield, Buckinghamshire HP9 2FY; the Annual General Meeting will be held on Tuesday 2nd November 2004. 7 The calculation of earnings per share is based on the profit on ordinary activities after taxation and minority interest divided by the average number of shares in issue during the year of 177,666,200 (2003 - 177,639,197). 8 If approved at the Annual General Meeting on 2 November 2004, the final dividend of 2.8p per share will be paid on 26 November 2004 to shareholders on the register at 29 October 2004. This information is provided by RNS The company news service from the London Stock Exchange

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Mcbride (MCB)
UK 100

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