Interim Results
Paterson Zochonis PLC
13 February 2001
13 February 2001
PATERSON ZOCHONIS plc
The directors submit the unaudited accounts of the group for the half-year to
30th November 2000
Consolidated Profit and Loss Account
Half-year Half-year
to to
30th 30th Year
to
November November 31st
May
2000 1999 2000
£000 £000 £000
Turnover £200,220 £204,796 £409,074
Operating profit 17,317 15,477 29,796
Exceptional income - 5,979 5,979
17,317 21,456 35,775
Investment income 5,826 9,788 14,616
Interest payable (1,007) (3,705) (4,856)
Profit before taxation 22,136 27,539 45,535
Taxation
United Kingdom (3,210) (5,103) (5,947)
Overseas (3,849) (2,779) (7,956)
(7,059) (7,882) (13,903)
Profit after taxation 15,077 19,657 31,632
Equity minority (1,291) (1,288) (2,667)
interests
Profit attributable to
members of the company 13,786 18,369 28,965
Dividends (3,469) (3,303) (10,971)
Profit for the period £10,317 £15,066 £17,994
retained
Earnings per ordinary and
'A' ordinary share of 10p
After exceptional items 28.24p 37.91p 59.43p
Before exceptional items 28.24p 29.08p 50.61p
Dividend per ordinary and
'A' ordinary share of 6.50p 6.15p 21.50p
10p
Paterson Zochonis plc
Consolidated Balance Sheet
30th 30th
November November 31st May
2000 1999 2000
£000 £000 £000
Fixed assets
Intangible assets
Goodwill 525 559 539
Negative goodwill (2,541) - -
(2,016) 559 539
Tangible assets 175,409 190,242 179,873
173,393 190,801 180,412
Current assets
Stocks 98,244 104,313 92,906
Debtors 60,305 67,700 56,142
Investments 107,788 88,818 102,388
Cash at bank and in hand 11,729 9,411 10,799
278,066 270,242 262,235
Creditors (due within one year)
Bank loans and overdrafts (17,899) (55,389) (27,564)
Others (89,979) (92,411) (85,171)
(107,878) (147,800) (112,735)
Net current assets 170,188 122,442 149,500
Total assets less current liabilities 343,581 313,243 329,912
Creditors (due after one year) (20,149) (10,193) (19,744)
Provisions for liabilities and charges (8,759) (9,816) (7,718)
Net assets £314,673 £293,234 £302,450
Capital and reserves
Equity ordinary share capital 4,744 4,744 4,744
Non-equity preference share capital 7,898 7,898 7,898
Total called up share capital 12,642 12,642 12,642
Reserves attributable to equity interests 255,723 239,988 244,681
Total shareholders' funds 268,365 252,630 257,323
Equity minority interests 46,308 40,604 45,127
£314,673 £293,234 £302,450
Paterson Zochonis plc
Group Cash Flow Statement
Half-year Half-year
to 30th to 30th Year to
November November 31st
May
2000 1999 2000
£000 £000 £000
Cash flow from operating activities 26,665 18,914 72,321
Returns on investments and servicing of finance 4,675 5,277 6,604
Taxation (5,630) (1,713) (9,124)
Capital expenditure and financial investment (3,592) (5,738) (6,869)
Acquisitions and disposals 1,283 (5,133) (5,133)
Equity dividends paid (7,283) (6,476) (9,394)
Cash inflow before use of liquid resources and 16,118 5,131 48,405
financing
Management of liquid resources (4,959) (2,464) (15,555)
Financing (5,642) (7,171) (24,119)
Increase / (decrease) in cash in the period £5,517 £(4,504) £8,731
Reconciliation of net cash flow to movement in net
funds
Increase / (decrease) in cash in the period 5,517 (4,504) 8,731
Cash outflow from financing 5,642 7,171 24,119
Cash outflow from
management of liquid resources 4,959 2,464 15,555
Change in net funds resulting from cash flows 16,118 5,131 48,405
Currency retranslation (123) 520 29
Deposits and loans in former associate now
consolidated as a subsidiary - 8,263 8,263
Movement in net funds in the period 15,995 13,914 56,697
Opening net funds 85,623 28,926 28,926
Closing net funds £101,618 £42,840 £85,623
Reconciliation of operating profit to operating
cash flows
Operating profit 17,317 21,456 35,775
Amortisation of goodwill (18) 13 22
Depreciation and adjustments on disposals 8,528 8,282 15,505
Provisions 1,001 915 1,754
Stocks (4,347) (753) 16,893
Debtors (4,421) (3,485) 8,527
Creditors 8,605 (7,514) (6,155)
Net cash flow from operating activities £26,665 £18,914 £72,321
Paterson Zochonis plc
Group Cash Flow Statement continued
Analysis of net funds
At 31st At 30th
May Cash Exchange November
2000 flow Difference 2000
£000 £000 £000 £000
Cash in hand and at bank 10,799 1,008 (78) 11,729
Overdrafts (10,571) 4,509 (257) (6,319)
5,517
Loans due within one year (16,993) 5,642 (229) (11,580)
Deposits 83,690 (508) 441 83,623
Other current asset investments 18,698 5,467 - 24,165
4,959
£85,623 £16,118 £(123) £101,618
Statement of Total Recognised Gains and Losses
Half-year Half-year
to 30th to 30th Year to
November November 31st May
2000 1999 2000
£000 £000 £000
Profit for the period 13,786 18,369 28,965
Currency retranslation 922 (7,474) (7,474)
Reversal of taxation on Nigeria revaluation - - 1,765
surplus
Expenses of Nigeria rights issue (197) - -
Total recognised gains and losses for the period £14,511 £10,895 £23,256
Paterson Zochonis plc
Operating and Financial Review
Highlights
* Operating profits before exceptional income have increased by 11.8% to £
17.3m from £15.5m.
* Net funds have increased by £16m to £101.6m.
* The interim dividend has been raised by 5.7% from 6.15p to 6.50p.
Europe
Operating profits have increased significantly within the UK as a result of the
focus on margin improvement and also the market success of Imperial Leather
Foamburst. The packaging of the Imperial Leather range has been redesigned and
is being launched over the next few months.
Profits have continued to improve in Eastern Europe with the actions taken to
reduce costs. The market remains difficult in Poland, although export sales to
Russia are expanding.
Although tight monetary policy is being maintained in Greece, our olive oil and
margarine business is showing signs of improved performance.
Asia
Overall results in the region have been strong with Indonesia continuing to
perform very well with sales growth in excess of 30%. This has been achieved
through further expansion of the distribution network and the extension of the
brand ranges to cover young children and teenagers.
Profits in Australia have risen with a programme of rationalisation of the
product ranges, although consequently, turnover is marginally down.
Trading in China has continued to be difficult with losses being suffered in
the first half. Sales levels remained low as the new distribution network
becomes established.
Both Thailand and the Middle East have raised profitability.
Africa
The impact of the action taken by the government in Nigeria and the effect of
the higher oil prices have begun to be seen within the economy. Profits have
increased in the period.
Overall results in the other African units, Ghana, Kenya and Cameroun show some
improvement on last year.
Investments
Cash flow has continued to be positive with net funds increasing to £101.6m at
30th November. The improvement led to an increase in investment income of £1.1m
and a reduction in interest payable of £2.7m. Although the equity portfolio
performed well against the market over the period, investment gains realised
were £5.0m down on the previous year when profits were taken on the portfolio
taking opportunity of the high level of world markets.
Indexation relief on these gains had resulted in a low tax charge in that
period.
Paterson Zochonis plc
Operating and Financial Review Continued
Results and dividends
An interim dividend of 6.50p per share for the half-year to 30th November 2000
(1999 - 6.15p) has been declared, payable on 6th April 2001 to ordinary and 'A'
ordinary shareholders on the register on 9th March 2001.
£000 £000
Profit for the period 13,786
Dividends:
Preference shares
71/2% cumulative 29
10% cumulative 356
385
Ordinary and 'A' ordinary shares
Interim at 6.50p 3,084
Profit retained £10,317
Directors
Mr P. Giouras, after almost 43 years service, and having reached normal
retirement age, has expressed his intention to step down as a director of the
company at the end of May 2001. Mr Giouras' entire career has been spent in the
development and expansion of our operations in Africa for which he has been
regional director for the last 11 years. He used this experience to great
effect more latterly when he took over responsibility for the group's
businesses in the Far East.
Mr R.H. Sellers joined the board on 1st January 2001 as a non-executive
director. Rod Sellers retired from the board of British Vita PLC in mid 1997
for whom, during a career spanning 26 years, he had held the positions of
finance director, chief executive and latterly deputy chairman. He is currently
chairman of Ultraframe PLC and a non-executive director of SSL International
plc. The group will benefit from his extensive experience of manufacturing
operations around the world.
Outlook
The actions taken to increase operating margins and the relative economic
stability in our principal developing markets, have resulted in improved
operating performance in all our major units. Earnings per share before
exceptional items are similar to the same period last year, with the much
improved operating performance having largely made up for the one-off
investment gains taken in the first half of last year. This trend to higher
operating performance is anticipated to continue in the second half of the
year.
Paterson Zochonis plc
Notes
Prior year exceptional income arose on the inclusion in the accounts of amounts
due from the Nigerian subsidiaries in respect of technical fees and royalties,
which were previously accounted for only when received.
The half-year figures are unaudited. The figures for the year ended 31st May
2000 are an abridged statement of the group audited accounts for that year. The
audited accounts, containing an unqualified audit report, have been delivered
to the Registrar of Companies.
Copies of the interim statement are being mailed to shareholders on 13 February
2001 and will also be available from the registered office:
Cussons House
Bird Hall Lane
Stockport
SK3 0XN
Enquiries between the hours of 9.00 a.m. and 5.15 p.m. on 13 February 2001 to:
Graham Calder
Finance Director
Paterson Zochonis plc
Tel: 0161 491 8000