Final Results
PZ CUSSONS PLC
01 August 2006
1st August 2006
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR TO 31ST MAY 2006
Results (before exceptional items1) YE YE % change
31/05/06 31/05/05
Revenue £539.9m £480.1m + 12%
Operating profit £60.2m £53.5m + 13%
Profit before tax £63.6m £58.1m + 9%
Adjusted basic earnings per share 88.96p 78.51p + 13%
Statutory results
Operating profit £57.8m £48.8m + 18%
Profit before tax £61.2m £53.4m + 15%
Basic earnings per share 83.30p 66.01p + 26%
Dividend per share 38.80p 35.25p + 10%
Net funds2 £51.9m £74.0m
1 Exceptional items are detailed in note 2.
2 Net funds, above and hereafter, is defined as cash, short term deposits and
current asset investments less borrowings.
Highlights
• Successful completion of the milk factory in Nigeria, constructed with
Glanbia Plc, with sales of milk exceeding expectations.
• Significant growth in our white goods business with Haier in Nigeria
with further expansion of the product range.
• Commissioning of the new bar soap factory in Thailand.
• Completion of the restructuring of our Eastern European business.
• Commencement of roll-out of Charles Worthington brand into UK nationwide
trade.
• Planned investment in a new UK liquids factory and further expansion of
the Nigeria milk joint venture.
• Planned succession of new Chief Executive, new Finance Director and new
Regional Director Africa.
• Proposed ten for one share split.
Commenting today, Anthony Green (Chairman) said:
'2006 has been another year of considerable progress for PZ Cussons. Revenue and
profits have improved as a result of good performance in all key territories,
particularly Nigeria, and the elimination of losses incurred last year in
Russia. The new board appointments from within our planned succession programme
mean that we now have younger directors in place to complement the current
highly experienced team. Our strategic focus remains on growth and margin
improvement in selected markets and we face the future with confidence.'
Press Enquiries
PZ Cussons Graham Calder (Deputy Chairman)
Alex Kanellis (Chief Executive)
Brandon Leigh (Finance Director)
Weber Shandwick Terry Garrett, John Moriarty
On 1st August 2006 c/o Weber Shandwick on: 020 7067 0700
After 1st August to Graham Calder on: 0161 491 8000
An analysts' presentation will be held at 9.30am at the office of Weber
Shandwick, 14 Gray's Inn Road, London, WC1X 8WS
Overview
PZ Cussons is pleased to report another year of considerable progress for the
twelve months to 31st May 2006. Profit before tax and exceptional items rose 9%
to £63.6m (2005: £58.1m) on revenue up 12% to £539.9m (2005: £480.1m). After
exceptional items reported profit before tax increased by 15% to £61.2m (2005:
£53.4m). Basic earnings per share were 83.30p (2005: 66.01p). Adjusted for
exceptional items, adjusted earnings per share rose 13% to 88.96p (2005:
78.51p). As at 31st May 2006 the Group had net funds of £51.9m (2005: £74.0m).
The board is recommending a dividend increase of 10.1% for the year with a
proposed final dividend of 29.50p per share (2005: 26.60p) to give a total
dividend for the year of 38.80p per share (2005: 35.25p). Subject to approval at
the annual general meeting, the final dividend will be paid on 27th September
2006 to shareholders on the register at the close of business on 25th August
2006.
Trading performance - overview
Operating profit before exceptional items rose by 13% to £60.2m (2005: £53.5m)
on revenue up 12% to £539.9m (2005: £480.1m). This reflected good performances
in all key territories, particularly Nigeria, and the elimination of losses
incurred last year in Russia.
Mature markets
In mature markets, trade has been strong as a result of successful brand
development although this has required a higher level of investment to grow our
brands in an increasingly competitive environment. Pressure on margins has
continued with zero or negative inflation in selling prices as well as cost
increases on materials, utilities and freight largely as a result of higher
commodity and oil prices.
Emerging markets
In emerging markets, growth has largely arisen from our continued success in
Nigeria, where both the underlying business and new projects have contributed to
increased profitability. However, pressure on selling prices has been evident,
particularly in the more mature product categories where competition is
increasing. The highlight of the year was the successful completion of the milk
factory in Nigeria, constructed ahead of schedule in conjunction with Glanbia
Plc, with sales of milk exceeding expectations.
Financial position - overview
The Group's balance sheet remains strong with net funds at 31st May 2006 of
£51.9m (2005: £74.0m). Major expenditure in the year included £15.5m incurred on
the repayment of preference share capital and further investment in capital
expenditure and working capital, principally in Nigeria. Cash generated from
mature market operations effectively funds investment in emerging markets. In
addition, the group's equity investment portfolio was liquidated during the year
to generate funds, principally to fund the investment in Nigeria.
New projects
The Group announces two significant new projects:
In the UK, the Group is planning construction of a new, purpose built liquids
factory to provide additional capacity to meet the long-term supply needs of our
growing UK business. The new factory will be located close to the current site
in North Manchester which will close when production fully transfers across to
the new site in 2008. Net costs of the project are estimated at £15m over the
next two years, which should largely be funded by the proceeds from the UK
factory sites in Nottingham and Manchester.
In Nigeria, PZ Cussons and Glanbia are pleased to announce agreement to further
investment in their joint venture with an expansion of the current milk factory
to provide additional capacity. Plans to invest in the development of further
nutritional products are at an advanced stage. Work to extend the current
factory will commence later this year, with completion expected in 2008. The
Group's share of this cost will be approximately £5m.
Regional reviews
Performance by region
Operating profit before
Revenue (£m) exceptional items1 (£m)
2006 2005 2006 2005
Africa 211.8 159.4 25.1 20.8
Asia 113.9 107.7 12.5 11.9
Europe 214.2 213.0 22.6 20.8
_____ _____ _____ _____
Total 539.9 480.1 60.2 53.5
_____ _____ _____ _____
Africa
Performance in Nigeria has been strong with both revenue and profitability up on
the previous year. The division of the business into separate business units,
carried out during 2005, has proved very successful in its first full year of
operation, with increased focus brought to each of the following areas:
• Soaps and detergents;
• Health and beauty;
• Electrical goods (HPZ);
• Milk and nutrition (Nutricima); and
• Distribution.
Strong brand renovation across the core portfolios of soaps, detergents and
health and beauty resulted in improved revenue and profitability despite higher
costs and increased competition.
Growth in sales of fridges, freezers and air-conditioners continued with
significant increases in both revenue and profitability compared to the prior
year. Further growth is expected from the expansion of current distribution and
the introduction of further electrical products to the range.
The highlight of the year was the successful completion of the milk factory
which was constructed ahead of schedule in conjunction with Glanbia Plc, with
sales of milk in the year exceeding expectations. Sales of both powdered milk
and evaporated milk have been made under the brand name 'Nunu' and have been
very well received in the market.
The Nigerian currency has remained steady against the dollar during the year as
a result of continued political and economic stability, although the weakness of
the dollar against sterling in the second half has negatively impacted results
in that period.
The Nigerian business concluded a rights issue in the year resulting in further
investment from the UK of circa £20m which took the Group's holding to
approximately 61%. Funds raised are being used for the capital investment
programme which is focused on four key areas:
• Expansion of production capacities
• Improvements to factory infrastructures
• Installation of gas power generation capability
• Investment in nationwide depot network
This investment not only provides a sound capital investment platform for the
future but also complements the continuing margin improvement programme to
counter ongoing cost increases.
Revenue and profitability in Ghana and Kenya are ahead of last year as a result
of both growth and margin improvement. African brands are being
'pan-regionalised' to leverage the strength of the brands and to maximise
efficiencies, with haircare selected as the first such pan-regional project.
Asia
Australia continues to contribute significantly to the Group with excellent
innovation across its product portfolio of detergent, dishwash and personal care
brands. Radiant has maintained its position as a top two brand in the laundry
category through creative technical developments such as adding UV protection to
its formulation. Morning Fresh continues to be a significant brand in both the
automatic and manual dishwash market. The company's total dishwash share has
grown with the acquisition of the Trix manual dishwash brand in May 2005. The
integration of this brand into the business is progressing to plan with all
production now brought in-house. Whilst profitability of the total Australia
business improved year on year, raw material and freight cost increases impacted
on the business performance.
Consumer disposable income in Indonesia declined during the year as a result of
significant increases in the price of oil following the withdrawal of government
subsidies. Despite this, revenue and profitability were maintained at last
year's level due to consumer loyalty to the product portfolio, and in particular
the baby range where Cussons Baby continues to hold the number one position in
terms of market share. A significant margin improvement programme was rolled out
during the year to counter the effects of both competition and cost increases.
In the other Asian units, Thailand, Malaysia and the Middle East, revenue and
profitability were maintained at last year's level.
Europe
In the UK, whilst the market remains competitive with continued pressure on
selling prices, additional investment in brand development resulted in good
performance.
The Imperial Leather shower range was relaunched with exciting new fragrances
and supported by a nationwide media campaign. The Original Source brand,
purchased in 2002, has been completely renovated with distinctive packaging and
has been favourably received by the consumer. The Carex range continues to be
strong with the bathroom variants, launched last year, performing well.
A decision was taken earlier this year to expand the distribution of the Charles
Worthington brand into the nationwide trade. The supply into all key retailers
has now begun with significant in-store displays being rolled out over the
coming months. Initial feedback from both the trade and the consumer is very
favourable.
The Nottingham factory has now closed ahead of schedule and all bar soap is
being supplied from the newly constructed Thailand factory which is operating to
plan. A conditional contract for the sale of the Nottingham site has now been
signed with completion expected within two years.
The restructuring programme for the business in Poland, announced last year, has
been successfully completed with losses of the unit now eliminated following the
withdrawal of a direct presence in the Russian market. The cost base of the
domestic operation has been considerably reduced through closure of the liquids
and creams factory in Warsaw, which was sold prior to the year-end, and through
overhead reduction at the head office. Whilst the Polish market remains
extremely competitive, successful brand renovation of the 'E' detergent and
Luksja soap ranges has resulted in improved margins.
Both revenue and margins in Greece have improved in the year. The portfolio of
products has been expanded with the launch of Minerva Benecol margarine and the
purchase of a small local pomace oil brand. The core Minerva olive oil range
will also be relaunched later this year.
Exceptional items
A net operating charge of £2.4m (2005: £4.7m) for exceptional items, which
comprises restructuring costs, profit on disposal of fixed assets and income
from debts previously written off. Further details are given in note 2.
Taxation
The effective tax rate before exceptional items was lower than the previous year
at 29.2% (2005: 30.5%) mainly due to the new Nigerian ventures being initially
eligible for tax free status.
Enfranchisement and preference share repayment
In June 2005 shareholder approval was given for the enfranchisement of the 'A'
non-voting shares and the repayment of the preference shares by a reduction of
share capital which has now been completed. As part of the enfranchisement, a
compensatory bonus issue, on the basis of one new ordinary share for every ten
ordinary shares held by each ordinary shareholder, was made on 29th June 2005.
This has resulted in dividends being paid on an enhanced number of shares.
Proposed share split
The board is now proposing to shareholders that a share split is undertaken to
further improve the liquidity of the company's shares. A proposal, therefore, of
a share split of ten shares per one share currently in issue is to be considered
as a resolution at the forthcoming annual general meeting. Further details can
be found in the separate circular containing the notice of meeting which will be
posted to shareholders with the Annual Report and Financial Statements.
Management
As planned, Nigel Green retired as Chief Executive on 31st May 2006 and was
succeeded by Alex Kanellis. Two other new executive directors also joined the
board during the year. Brandon Leigh, previously Group Financial Controller
became Finance Director on 1st January 2006 following Graham Calder's promotion
to Deputy Chairman and Chris Davis joined the board as Regional Director,
Africa.
Outlook
The Group's focus on selected markets, leading brands and first class
distribution continues to provide a clear strategy for the future. Over the next
year, the Group will be pursuing growth in all businesses as well as continuing
a sustained margin improvement programme to counter ongoing pressures on both
selling prices and costs.
The current economic and political stability in our key market of Nigeria has
greatly assisted our growth and encouraged our recent new investments. With our
plans for further expansion we look forward to the continuation of this
situation after the forthcoming elections in the spring of 2007.
The balance sheet remains strong with all projects currently being financed from
Group net funds.
Trading to date has been in line with management expectations. With a clear
strategy and continuing cadre of experienced senior management the directors
face the future with confidence.
Consolidated income statement for the year to 31st May 2006
Notes Before Exceptional Total Before Exceptional Total
exceptional items 2006 exceptional items 2005
items (note 2) items (note 2)
£m £m £m £m £m £m
____________________________________________________________________________________________________________
Revenue 1 539.9 - 539.9 480.1 - 480.1
Cost of sales (330.9) 1.0 (329.9) (284.5) (6.1) (290.6)
____________________________________________________________________________________________________________
Gross profit 209.0 1.0 210.0 195.6 (6.1) 189.5
Selling and distribution
expenses (86.7) (0.7) (87.4) (85.6) (0.5) (86.1)
Administrative expenses (62.0) - (62.0) (56.5) - (56.5)
Other (costs) / income - (2.7) (2.7) - 1.9 1.9
Share of results of
joint venture (0.1) - (0.1) - - -
____________________________________________________________________________________________________________
Operating profit 1 60.2 (2.4) 57.8 53.5 (4.7) 48.8
Finance income 4.3 - 4.3 5.3 - 5.3
Finance costs (0.9) - (0.9) (0.7) - (0.7)
____________________________________________________________________________________________________________
Net finance income 3 3.4 - 3.4 4.6 - 4.6
____________________________________________________________________________________________________________
Profit before taxation 63.6 (2.4) 61.2 58.1 (4.7) 53.4
Taxation 4 (18.6) - (18.6) (17.7) (0.6) (18.3)
____________________________________________________________________________________________________________
Profit for the year 45.0 (2.4) 42.6 40.4 (5.3) 35.1
____________________________________________________________________________________________________________
Attributable to:
Equity holders of the
parent 37.8 (2.4) 35.4 34.1 (5.3) 28.8
Minority interest 7.2 - 7.2 6.3 - 6.3
____________________________________________________________________________________________________________
45.0 (2.4) 42.6 40.4 (5.3) 35.1
____________________________________________________________________________________________________________
Basic EPS (p) 6 83.30 66.01
Diluted EPS (p) 6 82.34 65.31
____________________________________________________________________________________________________________
Adjusted basic EPS (p) 6 88.96 78.51
Adjusted diluted EPS (p) 6 87.94 77.66
____________________________________________________________________________________________________________
The results shown above for both 2006 and 2005 relate to continuing operations.
Consolidated balance sheet as at 31st May 2006
31st May 2006 31st May 2005
£m £m
_________________________________________________________________________________
Assets
Non-current assets
Goodwill and other intangible assets 54.0 54.1
Property, plant and equipment 140.1 139.3
Investments in joint ventures - 0.1
Other investments 0.8 0.5
Receivables 0.1 0.1
Non-current assets held for sale 1.3 -
Retirement benefit surplus 23.4 23.1
_________________________________________________________________________________
219.7 217.2
_________________________________________________________________________________
Current assets
Inventories 142.7 128.9
Receivables and prepayments 87.2 70.6
Investments 2.2 16.2
Cash and short term deposits 65.8 65.7
Current taxation receivable 2.7 1.5
_________________________________________________________________________________
300.6 282.9
_________________________________________________________________________________
Total assets 520.3 500.1
_________________________________________________________________________________
Liabilities
Current liabilities
Borrowings (14.0) (5.2)
Trade and other payables (83.8) (81.9)
Current taxation payable (13.3) (11.4)
Provisions (1.9) -
_________________________________________________________________________________
(113.0) (98.5)
_________________________________________________________________________________
Non-current liabilities
Borrowings (2.1) (2.7)
Other liabilities (3.6) (5.8)
Deferred tax liabilities (24.6) (25.1)
UK retirement benefit obligation (30.5) (27.9)
Provisions (8.1) (12.1)
_________________________________________________________________________________
(68.9) (73.6)
_________________________________________________________________________________
Total liabilities (181.9) (172.1)
_________________________________________________________________________________
Net assets 338.4 328.0
_________________________________________________________________________________
Equity
Ordinary share capital 4.3 4.1
Preference share capital - 7.9
Capital redemption reserve 0.7 0.7
Revaluation reserve 27.3 28.1
Other reserve (2.9) (1.1)
Equity reserve 0.8 0.4
Currency translation reserve 3.3 5.5
Retained earnings 258.5 245.4
_________________________________________________________________________________
Equity attributable to equity holders of the
parent 292.0 291.0
Equity minority interest 46.4 37.0
_________________________________________________________________________________
Total equity 338.4 328.0
_________________________________________________________________________________
Consolidated cash flow statement for the year to 31st May 2006
Year to Year to
31st May 31st May
2006 2005
£m £m
_________________________________________________________________________________
Operating activities
Cash generated from operations 35.8 53.9
Taxation (18.3) (18.7)
_________________________________________________________________________________
Net cash flow from operating activities 17.5 35.2
_________________________________________________________________________________
Investing activities
Investment income received 8.5 7.1
Purchase of property, plant and equipment (25.5) (18.3)
Sale of property, plant and equipment 10.2 19.2
Purchase of intangible assets (0.2) (6.0)
Purchase of subsidiaries, including overdrafts
acquired - (24.5)
Net cash balances disposed of with subsidiary
undertaking (0.4) (0.2)
Payments to acquire interests in joint
ventures - (0.5)
Purchase of non-current asset investments (0.3) -
Purchase of current asset investments - (9.3)
Sale of current asset investments 14.0 8.6
Loans to joint ventures - (6.2)
_________________________________________________________________________________
Net cash flow from investing activities 6.3 (30.1)
_________________________________________________________________________________
Financing activities
Interest paid (0.9) (0.6)
Preference dividends paid (0.1) (0.8)
Dividends paid to minority shareholders in
subsidiary companies (2.5) (1.9)
Purchase of shares for ESOT (2.6) (0.3)
Ordinary dividends paid (15.2) (13.1)
Net (decrease) / increase in short term
borrowings (3.4) 2.8
Cash received from minority shareholders in
respect of rights issue 5.3 -
Repayment of preference share capital (15.5) -
_________________________________________________________________________________
Net cash flow from financing activities (34.9) (13.9)
_________________________________________________________________________________
Net decrease in cash and cash equivalents (11.1) (8.8)
Cash and cash equivalents at the beginning of
the year 65.4 73.6
Effect of foreign exchange rates (0.4) 0.6
_________________________________________________________________________________
Cash and cash equivalents at the end of the
year 53.9 65.4
_________________________________________________________________________________
Reconciliation of operating profit to cash generated from operations
2006 2005
£m £m
________________________________________________________________________________
Profit before tax 61.2 53.4
Adjustment for finance income (3.4) (4.6)
________________________________________________________________________________
Operating profit 57.8 48.8
________________________________________________________________________________
Depreciation and adjustments on disposals 10.1 6.3
Loss on sale or termination of operations - 3.3
Add back charge for shares purchased for ESOT 0.8 0.2
Impairment of tangible fixed assets 3.3 -
________________________________________________________________________________
Operating cash flows before movements in working
capital 72.0 58.6
Movements in working capital:
Inventories (14.0) (13.4)
Receivables (18.2) 6.7
Payables (1.9) (3.4)
Provisions (2.1) 5.4
________________________________________________________________________________
Cash generated from operations 35.8 53.9
________________________________________________________________________________
Consolidated statement of total recognised income and expense
for the year to 31st May 2006
2006 2005
£m £m
________________________________________________________________________________
Actuarial losses on defined benefit pension schemes (3.8) (3.6)
Exchange differences on translation of foreign operations (2.4) 5.9
Taxation on items taken directly to equity 1.8 1.7
________________________________________________________________________________
Net (expense) / income recognised directly in equity (4.4) 4.0
Profit for the year 42.6 35.1
Adoption of IAS 39 2.0 -
________________________________________________________________________________
Total net income and expense recognised for the year 40.2 39.1
________________________________________________________________________________
Attributable to:
Equity holders of the parent 33.2 32.3
Minority interests 7.0 6.8
________________________________________________________________________________
NOTES
1 Segmental reporting
Geographic segments
2006 Africa Asia Europe Eliminations Total
£m £m £m £m £m
_________________________________________________________________________________
Total gross segment revenue 211.9 116.8 355.4 (144.2) 539.9
Inter segment revenue (0.1) (2.9) (141.2) 144.2 -
_________________________________________________________________________________
Revenue 211.8 113.9 214.2 - 539.9
Segmental operating profit
before exceptional items 25.1 12.5 22.6 - 60.2
Exceptional items (0.5) (0.2) (1.7) - (2.4)
_________________________________________________________________________________
Segmental operating profit 24.6 12.3 20.9 - 57.8
_________________________________________________________________________________
2005
_________________________________________________________________________________
Total gross segment revenues 159.5 108.7 329.9 (118.0) 480.1
Inter segment revenues (0.1) (1.0) (116.9) 118.0 -
_________________________________________________________________________________
Revenue 159.4 107.7 213.0 - 480.1
Segmental operating profit
before exceptional items 20.8 11.9 20.8 - 53.5
Exceptional items - (3.4) (1.3) - (4.7)
_________________________________________________________________________________
Segmental operating profit 20.8 8.5 19.5 - 48.8
_________________________________________________________________________________
Business segments
Revenue by business segment
2006 2005
£m £m
________________________________________________________________________________
Toiletries and household 435.8 416.9
Other 104.1 63.2
________________________________________________________________________________
539.9 480.1
________________________________________________________________________________
2 Exceptional items
The Group has adopted a columnar income statement format which seeks to
highlight significant items within the Group's results for the period. Such
items are considered by the directors to be exceptional in nature rather than
being representative of the underlying trading of the Group, and may include
such items as fundamental restructuring costs, material impairments of
non-current assets, and profit or loss on disposal or termination of operations.
The directors believe that the separate disclosure of these items is relevant to
an understanding of the Group's financial performance.
Year to 31st May 2006
Profit Profit
before after
taxation Taxation taxation
Exceptional items included within
operating profit: Effect on: £m £m £m
_________________________________________________________________________________
Restructuring of UK operations (i) (6.5) 1.6 (4.9)
Restructuring of smaller overseas
operations (ii) (3.1) - (3.1)
Profit on disposal of property, plant
and equipment (iii) 1.9 - 1.9
Income from bad debts previously
written off (iv) 5.3 (1.6) 3.7
_________________________________________________________________________________
Total (2.4) - (2.4)
_________________________________________________________________________________
(i) Restructuring of UK operations
A decision was taken in the previous financial year to close the soap
manufacturing factory in Nottingham and transfer the production to PZ Cussons
Thailand. The exceptional charge to the consolidated income statement of £6.5
million comprises impairment provisions for plant and machinery of £3.3 million
and other associated restructuring costs of £3.2 million.
(ii) Restructuring of smaller overseas operations
Costs of £3.1 million in relation to the rationalisation of the Group's smaller
operations, being the Cameroun business which has been put up for sale and the
USA operation which has been converted from direct sale to a licence
arrangement.
(iii) Profit on disposal of property, plant and equipment
During the year, the sale of the Group's liquids and cream factory in Warsaw
resulted in an exceptional gain on disposal of £1.9 million.
(iv) Income from bad debts previously written off
Net income of £5.3 million has been recognised in the period as a result of
recoveries from ECGD of bad debts written off several years ago, which have now
been recovered as a result of Nigeria's settlement with the Paris Club of
creditors.
3 Net finance income
2006 2005
£m £m
_______________________________________________________________________________
Current asset investment income:
Net investment gains 2.7 3.0
Interest and dividends receivable 1.6 2.3
_______________________________________________________________________________
4.3 5.3
Interest payable on bank loans and overdrafts (0.9) (0.7)
_______________________________________________________________________________
3.4 4.6
_______________________________________________________________________________
4 Taxation
2006 2005
£m £m
________________________________________________________________________________
Current tax 18.1 20.3
Deferred tax 0.5 (2.0)
________________________________________________________________________________
Total tax charge 18.6 18.3
________________________________________________________________________________
UK corporation tax is calculated at 30% (2005: 30%) of the estimated assessable
profit for the year. Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
The tax charge for the year can be reconciled to the profit per the consolidated
income statement as follows:
2006 2005
£m £m
________________________________________________________________________________
Profit before tax 61.2 53.4
________________________________________________________________________________
Tax at the UK corporation tax rate of 30% (2005: 30%) 18.4 16.0
Tax effect of expenses that are not deductible in
determining taxable profit 1.3 2.1
Tax effect of timing differences on which deferred tax is
not provided (0.2) (0.1)
Tax effect of utilisation of tax losses not recognised
in deferred tax (0.8) 1.8
Effect of different tax rates of subsidiaries in overseas
jurisdictions (0.7) (1.2)
Sale of properties - 0.5
Prior period adjustment 0.6 (0.8)
________________________________________________________________________________
Tax charge for the year 18.6 18.3
________________________________________________________________________________
5 AGM and dividend
The board is recommending a dividend increase of 10.1% for the year with a
proposed final dividend of 29.50p (2005: 26.60p) per share for a total of 38.80p
(2005: 35.25p).The gross amount for the proposed final dividend and interim
dividend is £16.4 million (2005: £14.8 million).
The date of the annual general meeting has been fixed for 25th September 2006
and dividend warrants in respect of the proposed final dividend, subject to
shareholders' approval, will be posted on 27th September 2006 to members on the
register at 5.00 pm on 25th August 2006.
6 Earnings per share
Basic earnings per share and diluted earnings per share are calculated by
dividing profit for the period attributable to equity holders by the weighted
average number of shares in issue:
Year ended Year ended
31st May 31st May
2006 2005
________________________________________________________________________________
Basic weighted average (000) 42,375 42,415
________________________________________________________________________________
Diluted weighted average (000) 42,872 42,872
________________________________________________________________________________
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 profit attributable to equity holders for the period is as follows:
2006 2005
£m £m
________________________________________________________________________________
Profit attributable to ordinary equity shareholders 35.3 28.0
Exceptional items (note 2) 2.4 5.3
________________________________________________________________________________
Adjusted profit 37.7 33.3
________________________________________________________________________________
Adjusted earnings per share
2006 2005
________________________________________________________________________________
Basic earnings per share 83.30p 66.01p
Exceptional items 5.66p 12.50p
________________________________________________________________________________
Adjusted basic earnings per share 88.96p 78.51p
________________________________________________________________________________
Diluted earnings per share 82.34p 65.31p
Exceptional items 5.60p 12.35p
________________________________________________________________________________
Adjusted diluted earnings per share 87.94p 77.66p
________________________________________________________________________________
7 Net funds
2006 2005
£m £m
________________________________________________________________________________
Cash at bank and in hand 25.9 14.9
Deposits 39.9 50.8
Current asset investments 2.2 16.2
Overdrafts (11.9) (0.3)
Loans due within one year (2.1) (4.9)
Loans due after one year (2.1) (2.7)
________________________________________________________________________________
Net funds 51.9 74.0
________________________________________________________________________________
8 Accounting policies
The financial statements 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). Results for the comparative period have been restated under IFRS as
adopted for use in the EU.
IFRS, as adopted by the EU, differs in certain respects from IFRS as issued by
the International Accounting Standards Board (IASB). However, the consolidated
financial statements for the periods presented would be no different had the
Group applied IFRS as issued by the IASB. References to IFRS hereafter should be
construed as references to IFRS as adopted by the EU.
The preparation of financial statements, in conformity with generally accepted
accounting principles under IFRS, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual results
ultimately may differ from those estimates.
The disclosures required by IFRS 1 'First-time adoption of International
Financial Reporting Standards' concerning the transition from UK GAAP (United
Kingdom generally accepted accounting practice) to IFRS are given in the
consolidated financial statements.
The financial statements have been prepared on a historical cost basis.
Whilst the financial information in this preliminary announcement has been
computed in accordance with IFRS this announcement does not itself contain
sufficient information to comply with IFRS. The company expects to publish full
financial statements that comply with IFRS on 24th August 2006.
9 Basis of financial statements
The 2006 results are an abridged version of the statutory financial statements
for the year ended 31st May 2006 which have been approved by the board of
directors and which carry an unqualified audit report. The 2005 results for the
year ended 31st May 2005 which were prepared under UK GAAP carry an unqualified
audit report and have been filed with the Registrar of Companies. Neither
financial statements contain a statement in respect of s.237(2) or (3) of the
Companies Act 1985.
Approved by the board of directors on 1st August 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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