Interim Results
McBride PLC
09 February 2006
9 February 2006
McBRIDE plc
Interim Announcement for the half-year ended 31 December 2005
McBride supplies over 1.2 billion units of Private Label Household and Personal
Care products each year to Europe's leading retailers.
Highlights of the half-year results are as follows:
• Group turnover was £270.4 million, up 1% (2004: £268.0 million)
• Operating profit was £15.4 million, down 18% (2004: £18.8 million)
• Basic Earnings Per Share reduced 18% to 5.8p (2004: 7.1p)
• Interim dividend per share of 1.6 pence, up 7% (2004: 1.5 pence)
• Strong underlying cash flow * of £11.7 million (2004: £16.2 million)
• Net debt reduced to £22.5 million (June 2005: £24.4 million)
* Cash flow before financing activities excluding rationalisation costs and
acquisition of subsidiaries
Miles Roberts, Chief Executive, commented:
'These results are in line with our expectations and have been achieved during
very competitive market conditions and at a time when the performance of our
Continental European business was disappointing. The initial findings from a
comprehensive business review show good opportunities to improve trading
performance with substantial effort currently focused on improving customer
service and operational efficiency.
Trading since the end of the half year has remained challenging but in line with
our expectations.'
For further information please contact:
McBride plc
Miles Roberts, Chief Executive 01494 60 70 50
Financial Dynamics 020 7831 3113
Andrew Dowler
Overview
• Sales to UK increased 2% to £115.2 million. Operating profit was £10.5
million, a decline of 6% versus 2004/5 first half but 3% improvement versus
the second half as ongoing operating efficiencies and overhead savings
offset the combined impact of continued selling price deflation and high
material costs.
• Sales to Continental Europe were flat at £151.8 million (£151.1 million in
2004/5) as growth in Eastern Europe offset weak Western European markets,
particularly France. Operating profit was also impacted by continuing
selling price deflation and high material costs, declining 30% to £5.7m.
• Personal Care sector sales, at £53.9 million, continued to grow from
£45.7 million in 2004/5 first half and £50.4 million in the second half.
• A continuing focus on cost, asset utilisation and working capital management
produced a strong £11.7 million underlying cash flow in spite of continuing
challenging market conditions. Capital expenditure remained below
depreciation and working capital only increased by £1.4 million.
• Following the initial findings of a business review, further substantial
efficiency improvements have been identified and implementation is well
underway. Additionally, assessments of under performing assets are nearing
completion.
• Levels of customer service recovered strongly during the first half of
the year and have subsequently been held at consistently high levels.
Strategy
As outlined last September, the Group is undertaking a comprehensive review of
its businesses and strategy. The initial findings identified significant
opportunities to improve trading performance and grow market share.
As one of the leading European Private Label businesses in the household and
personal care sectors, the Group has good market positions in both the UK and
France and more modest positions in Spain, Italy and the Low Countries. Its wide
geographic footprint allows it to benefit from the increasing share of the
overall European Grocery market being gained by the Private Label segment.
Private Label share in Europe has grown consistently over many years as a result
of retailer consolidation, store fascia rationalisation and the cross border
expansion of major retailers. This increasing share particularly reflects the
growth of the hard and soft discount format, which has seen its share in 2004
reach 17.8% of the European Grocery market with even more significant shares in
countries such as Germany. Private Label is seen as an important component of
retailer profitability whilst at the same time offering value to the consumer.
Although the fundamentals of the Private Label market are good, the environment
in Europe continues to be highly competitive with the overall retail grocery
market showing flat sales. Competition between Retailers for market share is
resulting in continuing price deflation which is putting their margins and
profitability under pressure. This is resulting in both Retailer consolidation
and development of Private label at the same time as a move to develop into new
markets and channels to provide growth. McBride is well positioned to benefit
from these trends.
The initial findings of the business and strategic review confirmed that whilst
the Group has a good reputation and technology with strong product offers, its
level of competitiveness, geographic strength and retailer coverage,
particularly on the Continent, needs to improve. The findings are focused on
improving the performance of current operation as well as looking for
disciplined opportunities to grow our share of the overall Private Label market.
The review has highlighted:
• the need to improve customer service
• to become the most cost effective supplier
• the need to reorganise internal structures to improve responsiveness
and accountability for performance
In addition we believe we can improve our market coverage in Europe. In
particular we are under represented in the Hard Discount sector of the market
that has shown significant growth over many years. Today this type of retailer
represents a very significant part of the overall market. Turning first to the
organic growth opportunities, we can continue to leverage the Group's
considerable geographic footprint and capitalise on its operational scale and
breadth of technology. Organic growth will, where appropriate, be supported by
disciplined acquisition in order to increase product range, enter new markets or
to increase capability across all Private Label channels. The Group's strong
underlying cash generation and financial position will underpin our growth
strategy.
Good progress has been made on a number of new appointments, most recently a new
Managing Director for the Continental European division has started and the
search for a new Group Finance Director is well underway.
Commercial Review
Continental Europe
The retail market throughout Europe remains highly competitive with the French
market showing a significant slow down particularly during the last three months
of 2005 following changes under the new 'Loi Dutreill' which encompasses supply
and promotional agreements between manufacturers and retail chains. The impact
of this new legislation produced a negative impact on volumes but, going
forward, it is expected that this change in legislation will ultimately be to
the benefit of Private Label in France. During the half year Household retail
(excludes contract business) sales were 2% lower than 2004/5, but Personal Care
retail sales, 13% up on 2004/5, continued to grow. Sales growth in Belgium,
Spain and Italy was offset by a reduction in France, where our Continental
European business is focused, and The Netherlands.
The Group has continued to develop its manufacturing capability in Poland and a
further expansion of mixing and filling has been implemented. Retail sales to
Poland, The Czech Republic and Hungary were up 10%, while total sales driven by
a major uplift in contract sales in Poland, increased 36%. The net impact was a
slight improvement in sales to Continental Europe of 0.5%.
United Kingdom
The UK market remains competitive with the major chains gaining further market
share. Private label household products reached 33.7% volume share up from 33.0%
last year with value share also improving from 23% to 23.2%. In McBride's core
personal care sectors private label share of the market showed a 5.7% volume
increase against the market increase of 2.9% whilst by value the private label
showed a decline of 0.7% while the market overall grew 3.9% as consumers are
being encouraged to purchase higher priced items.
Total retail sales to the UK grew 3% underpinned by a 23% growth in Personal
Care, whilst, as in Continental Europe, Household declined, by 3%.
Rest of World
Rest of world covers all markets outside of Europe. First half sales at £3.4
million were slightly below the £3.6 million in the previous year.
Financial Review
All the results here are reported under International Financial Reporting
Standards (IFRS). The 2004/5 results as permitted by IFRS are not restated in
respect of IAS 32 / 39 Financial Instruments. A full analysis of the impact of
adopting IFRS including reconciliations to UK GAAP for the six months ended 31
December 2004 and 30 June 2005 are included in a document published on 6
December 2005, Adoption of International Financial Reporting Standards. This
document is available at www.mcbride.co.uk within the investor relation's
section.
Profit and loss
First half turnover improved £2.4 million (1%) to £270.4 million versus 2004/5
with the growth driven by a strong Personal Care sector, up £8.2 million (18%).
Household sector sales however experienced a difficult first half and were down
£5.8 million (3%). In terms of geographic split, sales to UK improved 2%,
whilst sales to Continental Europe and to the Rest of the World were broadly
flat. Strong growth in Eastern Europe, primarily Poland, offset weak Western
European markets, particularly France, our largest Continental European market.
Group operating profit, at £15.4 million, was 18% down on 2004/5 first half as
overhead cost reductions and operating efficiencies, primarily in the UK, only
partially offset significantly higher material input costs and continuing sales
price deflation. The UK operating profit, at £10.5 million, was down 6% on 2004
/5 first half but up 3% on the second half reflecting operating efficiencies,
overhead reductions and an improving product mix. Continental Europe's profit,
at £5.7 million, was 30% behind 2004/5 first half and 15% behind the second
half.
First half net interest costs were £0.5 million versus £0.6 million in 2004/5.
A £4.5 million taxation charge (2004: £5.5 million) represents a 30% effective
rate.
Cash flow
The first half underlying cash flow performance - excluding rationalisation
costs, share repurchases, dividends and translation - was strong at £11.7
million. This compares well against £16.2 million in 2004/5 first half and
£11.3 million in the second half. Despite higher material costs working capital
only increased by £1.4 million and capital expenditure, at £7.5 million (2004:
£8.7 million), remained below depreciation. It should be noted that Personal
Care sector capital expenditure at £1.4 million was £0.9 million higher than in
2004/5 reflecting new product development and general growth in that sector.
There was a £2.2 million spend relating to the 2004/5 income statement
rationalisation programme charge and a £1.4 million outflow on share repurchases
net of issue proceeds from the exercise of SAYE options. Net debt reduced £1.9
million in the first half to £22.5 million at 31 December 2005.
Balance sheet
Property, plant and equipment reduced £2.0 million in the first half to £127.6
million as £1.5 million was reclassified into assets held for resale. £1.0
million of the reclassification relates to property at Breda following the
closure of its plant in 2004 and £0.5 million relates to Bampton (see 2004/5
rationalisation costs below).
The balance sheet also includes a £10.8 million liability net of deferred tax
for the UK defined benefit pension scheme deficit. The pre tax deficit has
increased £4.3 million since June 2005 primarily due to lower liability discount
rates in spite of an improved asset market environment.
Return on average capital employed for the half year reduced to 25% from 30% for
the half year to December 2004. A continuing focus on asset utilisation and
working capital management was unable to offset the adverse dual impact of sales
price deflation and higher material input costs.
2004/5 rationalisation costs
In 2004/5 there were £3.0 million of rationalisation costs charged to the income
statement. £1.3 million related to the closure of the Bampton plant and
transfer of its activities to another UK site, and the remaining £1.7 million
related to a Group wide rationalisation exercise. The Bampton site was closed
in the first half, with the production transfer expected to be completed early
in the second half. As at 31 December 2005, £0.4 million of its provision had
not been spent. The Group wide rationalisation exercise was completed by 31
December 2005 and all its provision was spent.
Senior Management Long Term Incentive Plan
As indicated in the 2005 Annual Report a Long Term Incentive Plan was introduced
during the first half for senior executives in the Group. In total 425,019
shares were granted on 9 December 2005 which will vest three years later, on 8
December 2008, providing the Group has achieved certain earnings per share and
Total Shareholder Return targets. The charge in the income statement for the
half year ended 31 December 2005 is less than £0.1 million.
Earnings per share and dividends
The weighted average number of shares in issue in the period was 177,575,301
(2004:177,332,040). Earnings per share reduced to 5.8p, down 18% on 2004.
An interim dividend of 1.6p, a 7% increase on 2004, will be paid on 26 May 2006
to shareholders on the register on 28 April 2006.
Current Trading and Outlook
These results are in line with our expectations and have been achieved during
very competitive market conditions and at a time when the performance of our
Continental European business was disappointing. The initial findings from a
comprehensive business review show good opportunities to improve trading
performance with substantial effort currently focused on improving customer
service and operational efficiency.
Trading since the end of the half year has remained challenging but in line with
our expectations.
Consolidated income statement unaudited
6 months to 6 months to
31 Dec 31 Dec Year ended
2005 2004 30 June 2005
Note £m £m £m
Revenue 1 270.4 268.0 537.1
Cost of sales (178.3) (171.6) (348.4)
Gross profit 92.1 96.4 188.7
Distribution costs (17.7) (17.4) (34.0)
Administrative costs:
Before rationalisation costs (59.0) (60.2) (119.7)
Rationalisation costs - - (3.0)
Administrative costs including rationalisation costs (59.0) (60.2) (122.7)
Operating profit 1 15.4 18.8 32.0
Financial Income 2.2 1.8 4.4
Financial expenses (2.7) (2.4) (5.8)
Net Financing costs 3 (0.5) (0.6) (1.4)
Profit before tax 14.9 18.2 30.6
Taxation 4 (4.5) (5.5) (9.2)
Profit for the period 1 10.4 12.7 21.4
Attributable to:
Equity holders of the parent 10.3 12.6 21.3
Minority interest 0.1 0.1 0.1
Profit for the period 10.4 12.7 21.4
Earnings per ordinary share (pence) 5
Basic 5.8 7.1 12.0
Diluted 5.7 6.8 11.6
Basic before rationalisation costs 5.8 7.1 13.2
Dividends 6
Paid in period (£m) 5.9 5.0 7.6
Paid in period (pence per share) 3.3 2.8 4.3
Proposed (£m) 2.8 2.8 5.9
Proposed (pence per share) 1.6 1.5 3.3
Note; all results are reported under International Financial Reporting Standards
(IFRS). The 2004/5 results as permitted by IFRS 1 are not restated in respect
of IAS 32 / 39 Financial Instruments. A full analysis of the impact of adopting
IFRS is available at www.mcbride.co.uk within the investor relations section.
Consolidated balance sheet unaudited
As at as at as at
31 Dec 2005 31 Dec 2004 30 June 2005
Note £m £m £m
Non-current assets
Intangible assets 9.0 8.7 8.7
Property, plant and equipment 127.6 134.6 129.6
Other non-current assets 0.5 0.5 0.5
Deferred tax 6.5 7.0 6.0
143.6 150.8 144.8
Current assets
Assets classified as held for sale 1.5 - -
Inventories 46.1 43.7 41.3
Trade and other receivables 99.1 109.0 106.3
Cash and cash equivalents 0.2 0.6 0.3
146.9 153.3 147.9
Total assets 1 290.5 304.1 292.7
Equity
Issued share capital 17.7 17.7 17.7
Share premium account 141.8 139.4 141.8
Other reserves 0.2 0.9 0.4
Retained earnings (61.7) (62.3) (62.0)
Total equity attributable to equity holders of the parent 98.0 95.7 97.9
Minority interest 0.4 0.2 0.2
Total equity and reserves 98.4 95.9 98.1
Non-current liabilities
Interest bearing loans and borrowings 15.4 23.3 20.7
Employee benefits 7 15.5 14.5 11.2
Provisions 2.1 2.1 2.2
Deferred tax 7.1 6.1 6.6
40.1 46.0 40.7
Current liabilities
Interest bearing loans and borrowings 7.3 6.8 4.0
Trade and other payables 140.4 150.1 143.8
Other financial liabilities 0.5 - -
Current tax payable 2.8 2.6 2.0
Provisions 1.0 2.7 4.1
152.0 162.2 153.9
Total equity and liabilities 290.5 304.1 292.7
Consolidated cash flow statement unaudited
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
Note £m £m £m
Profit before tax 14.9 18.2 30.6
Net finance costs 0.5 0.6 1.4
Pre-tax rationalisation charge in the period - - 3.0
Loss on sale of property, plant and equipment - - 0.1
Depreciation 9.1 9.2 18.6
Operating profit before changes in working capital 24.5 28.0 53.7
Decrease in debtors 8.5 9.8 9.6
Increase in inventories (4.4) (2.4) (1.1)
Decrease in creditors (5.5) (4.2) (7.4)
Rationalisation costs (2.2) (2.9) (3.7)
Cash generated from operations 20.9 28.3 51.1
Interest paid (0.9) (3.4) (2.8)
Taxation paid (3.1) (3.0) (7.2)
Net cash from operating activities 16.9 21.9 41.1
Cash flows from investing activities
Acquisition of property, plant and equipment (7.2) (8.7) (17.5)
Acquisition of intangible assets (0.3) - -
APL acquisition / deferred consideration payment - (2.8) (2.8)
Interest received 0.1 0.1 0.2
(7.4) (11.4) (20.1)
Cash flows from financing activities
Proceeds from issue of share capital 0.6 - 2.9
Repurchase of own shares (2.0) (1.9) (8.5)
Repayment of borrowings (5.3) (5.8) (8.2)
Payment of finance lease liabilities (0.2) (0.2) (0.4)
Dividends paid (5.9) (5.0) (7.6)
(12.8) (12.9) (21.8)
Net decrease in cash and cash equivalents (3.3) (2.4) (0.8)
Cash and cash equivalents at start of period (2.7) (1.8) (1.8)
Effect of exchange rate fluctuations on cash held (0.1) - (0.1)
Cash and cash equivalents at end of period (6.1) (4.2) (2.7)
The pre tax rationalisation charge for the year ended 30 June 2005 has been
added back to the operating profit before changes in working capital above so
that the cash flow impact can be separately highlighted, as rationalisation
costs, within cash generated from operations. Out of the £3.0 million total
rationalisation charge, £0.4 million was spent by 30 June 2005 and a further
£2.2 million in the half year to 31 December 2005.
Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
£m £m £m
Decrease in cash and cash equivalents in the period (3.3) (2.4) (0.8)
Cash outflow from movement in debt 5.3 5.8 8.2
Movement on finance leases 0.2 0.2 0.4
Change in net debt resulting from cash flows 2.2 3.6 7.8
Lease financing acquired with subsidiary - (0.3) (0.3)
Other new lease financing - - (0.1)
Translation differences (0.3) (1.4) (0.4)
Movement in net debt in the period 1.9 1.9 7.0
Net debt at the beginning of the period (24.4) (31.4) (31.4)
Net debt at the end of the period (22.5) (29.5) (24.4)
Consolidated statement of recognised income and expense unaudited
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
£m £m £m
Profit for the period 10.4 12.7 21.4
Foreign exchange translation differences 0.2 (0.1) (0.1)
Gain / (loss) on net investment hedge - 0.9 (0.1)
Actuarial loss net of deferred tax (3.0) (3.4) (1.1)
Total recognised income and expense for the period 7.6 10.1 20.1
Attributable to:
Equity shareholders of the parent 7.4 10.0 20.0
Minority interest 0.2 0.1 0.1
7.6 10.1 20.1
Reconciliation of equity attributable to equity holders of the parent unaudited
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
£m £m £m
At start of period 97.9 92.7 92.7
Opening adjustment re adoption of IAS 32 / 39 (0.3) - -
97.6 92.7 92.7
Profit for the year attributable to equity holders of the 10.3 12.6 21.3
parent
Other recognised income and expenses (2.9) (2.6) (1.3)
Tax on share options taken directly to equity (0.4) (0.1) (0.8)
Own shares acquired and held (0.3) - (2.4)
Own shares acquired and cancelled (1.0) (1.9) (6.9)
Shares issued 0.6 - 2.9
Equity dividends (5.9) (5.0) (7.6)
At end of period 98.0 95.7 97.9
Notes to the interim financial statements
Segment Reporting unaudited
Segment information is presented below in respect of the Group's geographical,
UK and Continental Europe, and business, Household and Personal Care, segments.
The primary format, geographic segments, is based on the Group's management and
internal reporting structure.
Geographic segments
Segment revenue Segment profit
6 months to 6 months to Year ended 6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 Jun 2005 31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m £m £m £m
UK 123.5 120.2 243.3 10.5 11.2 21.4
Continental Europe 152.1 151.3 301.1 5.7 8.2 14.9
Total reporting segments 275.6 271.5 544.4 16.2 19.4 36.3
Inter segment revenue (5.2) (3.5) (7.3) - - -
Rationalisation costs - - (3.0)
Corporate (0.8) (0.6) (1.3)
Revenue/Operating Profit 270.4 268.0 537.1 15.4 18.8 32.0
Net finance costs (0.5) (0.6) (1.4)
Income tax expense (4.5) (5.5) (9.2)
Profit after tax 10.4 12.7 21.4
The £3.0 million rationalisation costs in the year ended 30 June 2005 splits out
into £2.3 million in the UK and £0.7 million in Continental Europe.
Segment assets Segment liabilities
As at As at As at As at As at As at
31 Dec 2005 31 Dec 2004 30 Jun 2005 31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m £m £m £m
UK 110.4 119.9 115.8 (72.8) (78.2) (71.7)
Continental Europe 173.4 176.9 170.3 (91.8) (93.5) (90.3)
Total reporting segments 283.8 296.8 286.1 (164.6) (171.7) (162.0)
Corporate 6.7 7.3 6.6 (27.5) (36.5) (32.6)
Total 290.5 304.1 292.7 (192.1) (208.2) (194.6)
Segment capital expenditure Segment depreciation
6 months to 6 months to Year ended 6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 Jun 2005 31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m £m £m £m
UK 3.4 3.5 8.0 4.5 4.6 9.5
Continental Europe 4.1 5.1 9.4 4.6 4.6 9.1
Total reporting segments 7.5 8.6 17.4 9.1 9.2 18.6
Corporate - 0.1 0.1 - - -
Total 7.5 8.7 17.5 9.1 9.2 18.6
Business segments
Segment revenue Segment assets
6 months to 6 months to Year ended As at As at As at
31 Dec 2005 31 Dec 2004 30 Jun 2005 31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m £m £m £m
Household 216.5 222.3 441.0 223.2 239.8 230.5
Personal Care 53.9 45.7 96.1 60.6 57.0 55.6
Total reporting segments 270.4 268.0 537.1 283.8 296.8 286.1
Corporate 6.7 7.3 6.6
Total 290.5 304.1 292.7
Segment capital expenditure
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m
Household 6.1 8.1 14.8
Personal Care 1.4 0.5 2.6
Total reporting segments 7.5 8.6 17.4
Corporate - 0.1 0.1
Total 7.5 8.7 17.5
External revenue by destination
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 Jun 2005
£m £m £m
UK 115.2 113.3 227.4
Continental Europe 151.8 151.1 302.8
Rest of the World 3.4 3.6 6.9
270.4 268.0 537.1
2) Basis of preparation
EU law (IAS Regulation EC 1606/2002) requires that the next annual consolidated
financial statements of the Group, for the year ending 30 June 2006, be prepared
in accordance with International Financial Reporting Standards (IFRSs) as
adopted for use in the EU ('adopted IFRSs').
These interim financial statements for the half year ended 31 December 2005 and
31 December 2004, and the comparative figures for the year ended 30 June 2005
have been prepared on the basis of the recognition and measurement requirements
of IFRSs in issue that either are endorsed by the EU and effective (or available
for early adoption) at 30 June 2006 or are expected to be endorsed and effective
(or available for early adoption) at 30 June 2006, the Group's first annual
reporting date at which it is required to use adopted IFRSs. Based on these
adopted and unadopted IFRSs, the directors have made assumptions about the
accounting policies expected to be applied when the first annual IFRS financial
statements are prepared for the year ending 30 June 2006.
The Group published a document on 6 December 2005, Adoption of International
Financial Reporting Standards, which explained the accounting policy changes and
the key financial impacts of the change from UK GAAP to IFRS for the half year
ended 31 December 2004 and the year ended 30 June 2005. This document can be
located at www.mcbride.co.uk within the investor relations section. There has
been a reclassification of the deferred tax balances as at 31 December 2004 and
30 June 2005 from that document to this to more accurately present the balance
sheet positions.
The Group has taken the option as permitted by IFRS 1 to adopt IAS 32 and IAS 39
from 1 July 2005 onwards. The comparative periods have not been restated.
The adopted IFRSs that will be effective (or available for early adoption) in
the annual financial statements for the year ending 30 June 2006 are still
subject to change and to additional interpretations and therefore cannot be
determined with certainty. Accordingly, the accounting policies for that annual
period will be determined finally only when the annual financial statements are
prepared for the year ending 30 June 2006.
The interim financial statements for the six months ended 31 December 2005 were
approved by the Board on 8 February 2006.
Section 240 statement - The figures for the financial year ended 30 June 2005
are not the company's statutory accounts for that financial year. Those
accounts, which were prepared under UK Generally Accepted Accounting Practices,
have been reported on by the company's auditors and delivered to the registrar
of companies. The report of the auditors was unqualified and did not contain
statements under section 237 (2) or (3) of the Companies Act 1985.
3) Net financing costs
On the income statement, financial income includes £1.5 million (2004: £1.4
million) in respect of the expected return on pension scheme assets and
financial expenses includes £1.6million (2004: £1.4 million) in respect of
interest on pension scheme liabilities, pertaining to the UK defined benefit
pension scheme. This nets out to a £0.1 million charge (2004: nil).
4) Taxation
The £4.5 million tax charge for the half year ended 31 December 2005 (2004: £5.5
million) consists of £2.4 million (2004: £3.1 million) of UK tax and £2.1
million (2004: £2.4 million) of overseas tax.
5) Earnings per ordinary share
Basic earnings per share is calculated on profit after tax and minority
interests in accordance with IAS 33 Earnings per share. For the half year ended
December 2005 it is based on 177,575,301 ordinary shares of 10 pence each which
is the weighted average number of ordinary shares in issue during the period
(2004: 177,332,040).
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares to take account of the Group's share based payment
schemes where their conversion is dilutive. For the six months ended December
2005 it is based on 180,988,170 (2004: 184,763,839).
Adjusted basic earnings per share is shown by reference earnings before
rationalization costs since the directors consider this gives a more meaningful
measure of the underlying performance of the Group.
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
£m £m £m
Earnings used to calculate Basic and Diluted EPS 10.3 12.6 21.3
Rationalisation costs after tax - - 2.1
Adjusted earnings 10.3 12.6 23.4
6) Dividends
The proposed interim dividend of 1.6 pence per share (2004: 1.5 pence) was
approved by the Board on 8 February 2006. However, the £2.8 million cost (2004:
£2.6 million) was not included as a liability as at 31 December 2005 in
accordance with IAS 10 Events after the balance sheet date. Dividends paid in
the period totaled £5.9 million (2004: £5.0 million).
7) Employee benefits
Under IFRS, the Group's opening balance sheet as at 1 July 2004 reflects the
assets and liabilities of its defined benefit scheme. From this transition
date, the Group has chosen to apply the amendment to IAS 19 Employee benefits
which allows actuarial gains and losses to be recognised immediately in the
Consolidated Statement of Recognised Income and Expense. As at 31 December 2005
there is a £15.5 million employee benefit liability less a £4.7 million deferred
tax asset.
Financial calendar for the year ending 30 June 2006
Dividends
Interim Announcement 9 February 2006
Payment 26 May 2006
Final Announcement September 2006
Payment November 2006
Results
Interim Announcement 9 February 2006
Preliminary statement for full year Announcement September 2006
Report and Accounts Circulated September 2006
Annual General Meeting To be held 31 October 2006
Exchange rates
The exchange rates used for conversion to sterling were as follows:
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 Dec 2005 31 Dec 2004 30 June 2005
Average rate:
Euro 1.47 1.46 1.46
Polish Zloty 5.82 6.34 6.14
Czech Koruna 43.27 45.89 44.86
Hungarian Forint 364.8 361.9 361.3
Closing rate:
Euro 1.46 1.41 1.48
Polish Zloty 5.59 5.75 5.99
Czech Koruna 42.27 42.87 44.51
Hungarian Forint 367.4 347.0 365.7
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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