Interim Results

PZ CUSSONS PLC 10 February 2004 Tuesday 10th February 2004 PZ CUSSONS PLC INTERIM ANNOUNCEMENT Highlights • Operating profits increased by 4.3% to £26.2m from £25.1m • Pre-tax profits increased by 28.3% to £27.3m from £21.2m • Diluted earnings per share increased by 41.0% to 41.31p from 29.30p • Net funds increased by £1.6m to £73.7m from £72.1m at 31st may 2003 • The interim dividend has been raised by 7.3% to 8.05p per share from 7.50p Europe In the UK, new product launches have continued to expand the Imperial Leather, Carex and Original Source ranges, with the latter performing particularly strongly. However the market has been very competitive with the large supermarket chains positioning for overall share. This has impacted on UK turnover which has been fairly flat. Relaunches of the main brands in Poland have been successful overall and domestic sales have increased by 16%. Export levels are similar to last year and action has now been taken to change distributors in Russia to give greater coverage throughout the country to capitalise on our well known brands, in particular E detergent powder. Sales in Greece have been consistent with the record levels achieved last year, however margins are now suffering as olive oil prices have risen as a result of the poor olive harvest in 2003. Africa Turnover in Nigeria in naira is 18% up on the previous year, resulting from the investment in increased factory capacities for detergents and soaps and the new refrigerator and feminine hygiene factories coming on stream. Groundwork has now started for the construction of the milk factory, which is being built in a joint venture with Glanbia PLC and should be in full production in 2005 . The recent significant weakening of the dollar is beginning to impact on operating margins, with the resultant price increases in imported raw materials which are largely from Europe. Turnover and profitability in Ghana, Kenya and Cameroun have improved. Asia Overall turnover and profitability have increased in the region, with Australia performing particularly strongly. The rapid rate of growth achieved in recent years in Indonesia and Thailand has currently moderated as distribution coverage has now reached planned levels. There are plans to expand further by extending the brand ranges with new product developments. The rise in palm oil prices has impacted on soap margins. Turnover and profitability have improved in the Middle East but China continues to perform poorly. Action has been taken to improve the Chinese management. Investments The value of the equity portfolio increased by 30% in the period, to £14.8m from £11.4m. £1.1m has been taken to profit with realised gains and released provisions, leaving £4.3m of unrealised surplus at 30th November 2003. Purchase of own shares The company has made no further purchases of its own shares in the six months to 30th November 2003. Directors Mr D W Lewis (age 59), a partner of Addleshaw Goddard solicitors, London, will join the board of PZ Cussons Plc as a non-executive director on 1st June 2004. Mr W S Rogers (age 68) will retire from the board on 31st May 2004. Dividends An interim dividend of 8.05p per share for the half-year to 30th November 2003 (2002 - 7.50p) has been declared, payable on 6th April 2004 to ordinary and 'A' ordinary shareholders on the register on 5th March 2004. £000 £000 -------------------------------------------------------------------------------- Profit for the period 17,204 Dividends: Preference shares 71/2% cumulative (29) 10% cumulative (356) -------------------------------------------------------------------------------- (385) Ordinary and 'A' ordinary shares Interim at 8.05p (3,246) Adjustment for May 2003 proposed final at 21.50p on shares transferred from ESOT (2) -------------------------------------------------------------------------------- Profit retained 13,571 -------------------------------------------------------------------------------- Outlook Although trading levels are generally strong the recent rapid fall in the value of the dollar will impact on operating profits for the second half as a result of translation losses. In certain units, in particular Nigeria, there is pressure on margins as the weak dollar impacts on imported raw material costs. The continuing focus for PZ Cussons is to improve operating profitability and to pursue growth in all units, in particular the UK, Nigeria and Indonesia. The balance sheet remains strong, giving the group adequate funds to finance planned opportunities for growth and to have the flexibility to purchase its own shares. 10th February 2004 PZ CUSSONS PLC Consolidated profit and loss account Half-year to Half-year to Year to 30th November 30th November 31st May 2003 2002 2003 £000 £000 £000 ------------------------------------------------------------------------------------------------ Turnover 245,088 233,802 465,878 ------------------------------------------------------------------------------------------------ Operating profit 26,215 25,135 54,691 Net investment income / interest payable 1,038 (3,888) (3,541) ------------------------------------------------------------------------------------------------ Profit before taxation 27,253 21,247 51,150 Taxation United Kingdom (3,945) (1,900) (4,894) Overseas (5,003) (5,109) (11,945) ------------------------------------------------------------------------------------------------ (8,948) (7,009) (16,839) ------------------------------------------------------------------------------------------------ Profit after taxation 18,305 14,238 34,311 Equity minority interests (1,101) (1,372) (3,758) ------------------------------------------------------------------------------------------------ Profit attributable to members of the company 17,204 12,866 30,553 Dividends (3,633) (3,336) (12,329) ------------------------------------------------------------------------------------------------ Profit for the period retained 13,571 9,530 18,224 ================================================================================================ Basic earnings per ordinary and 'A' ordinary share of 10p 41.72p 29.57p 71.90p Diluted earnings per ordinary and 'A' ordinary share of 10p 41.31p 29.30p 71.18p Dividend per ordinary and 'A' ordinary share of 10p 8.05p 7.50p 29.00p PZ CUSSONS PLC Consolidated balance sheet 30th November 30th November 31st May 2003 2002 2003 £000 £000 £000 -------------------------------------------------------------------------------- Fixed assets Intangible assets 9,994 10,537 10,261 Goodwill 906 961 933 Negative goodwill (2,192) (2,323) (2,258) -------------------------------------------------------------------------------- (1,286) (1,362) (1,325) Tangible assets 139,414 146,112 149,933 Investments 833 1,022 209 -------------------------------------------------------------------------------- 148,955 156,309 159,078 -------------------------------------------------------------------------------- Current assets Stocks 114,869 129,715 122,515 Debtors due within one year 66,864 62,471 60,387 Debtors due after one year 5,781 7,890 6,254 Investments 72,526 80,303 69,663 Cash at bank and in hand 9,458 14,229 17,690 -------------------------------------------------------------------------------- 269,498 294,608 276,509 Creditors (due within one year) Bank loans and overdrafts (7,732) (32,349) (15,246) Others (92,898) (100,425) (99,011) -------------------------------------------------------------------------------- (100,630) (132,774) (114,257) -------------------------------------------------------------------------------- Net current assets 168,868 161,834 162,252 -------------------------------------------------------------------------------- Total assets less current liabilities 317,823 318,143 321,330 Creditors (due after one year) (16,335) (17,826) (16,531) Provisions for liabilities and charges (14,859) (14,991) (15,520) -------------------------------------------------------------------------------- Net assets 286,629 285,326 289,279 ================================================================================ Capital and reserves Equity ordinary share capital 4,073 4,150 4,073 Non-equity preference sharecapital 7,898 7,898 7,898 -------------------------------------------------------------------------------- Total called up share capital 11,971 12,048 11,971 Reserves attributable to equity interests 241,308 233,987 239,289 -------------------------------------------------------------------------------- Total shareholders' funds 253,279 246,035 251,260 Equity minority interests 33,350 39,291 38,019 -------------------------------------------------------------------------------- 286,629 285,326 289,279 ================================================================================ PZ CUSSONS PLC Group cash flow statement Half-year to Half-year to Year to 30th November 30th November 31st May 2003 2002 2003 £000 £000 £000 -------------------------------------------------------------------------------- Cash flow from operating activities 26,289 8,672 45,438 Returns on investments and servicing of finance (1,109) (4,939) (6,425) Taxation (6,616) (7,116) (15,911) Capital expenditure and financial investment (7,670) (16,880) (24,469) Equity dividends paid (8,668) (8,080) (11,105) -------------------------------------------------------------------------------- Cash inflow / (outflow) before use of liquid resources and financing 2,226 (28,343) (12,472) Management of liquid resources (4,293) 23,540 34,141 Financing 555 (4,506) (19,174) -------------------------------------------------------------------------------- (Decrease) / increase in cash in the period (1,512) (9,309) 2,495 ================================================================================ Reconciliation of net cash flow to movement in net funds (Decrease) / increase in cash in the period (1,512) (9,309) 2,495 Cash (inflow) / outflow from financing (555) (6,294) 1,390 Cash outflow / (inflow) from management of liquid resources 4,293 (23,540) (34,141) -------------------------------------------------------------------------------- Change in net funds resulting from cash flows 2,226 (39,143) (30,256) Currency retranslation (638) (2,084) (1,047) -------------------------------------------------------------------------------- Movement in net funds in the period 1,588 (41,227) (31,303) Opening net funds 72,107 103,410 103,410 -------------------------------------------------------------------------------- Closing net funds 73,695 62,183 72,107 ================================================================================ Reconciliation of operating profit to operating cash flows Operating profit 26,215 25,135 54,691 Amortisation of goodwill and other intangible assets 228 95 325 Depreciation and adjustments on disposals 9,363 8,373 13,074 Provisions 401 369 147 Stocks (2,517) (23,160) (17,555) Debtors (9,753) (12,888) (5,263) Creditors 2,352 10,748 19 -------------------------------------------------------------------------------- Net cash flow from operating activities 26,289 8,672 45,438 ================================================================================ PZ CUSSONS PLC Group cash flow statement continued Analysis of net funds At 31st At 30th May Cash Exchange November 2003 flow difference 2003 £000 £000 £000 £000 -------------------------------------------------------------------------------- Cash in hand and at bank 17,690 (8,086) (146) 9,458 Overdrafts (13,010) 6,574 850 (5,586) -------------------------------------------------------------------------------- (1,512) Loans due within one year (2,236) 4 86 (2,146) Loans due after one year - (559) 2 (557) -------------------------------------------------------------------------------- (555) Deposits 55,222 2,268 (946) 56,544 Other current asset investments 14,441 2,025 (484) 15,982 -------------------------------------------------------------------------------- 4,293 -------------------------------------------------------------------------------- 72,107 2,226 (638) 73,695 -------------------------------------------------------------------------------- Statement of total recognised gains and losses Half-year to Half-year to Year to 30th November 30th November 31st May 2003 2002 2003 £000 £000 £000 -------------------------------------------------------------------------------- Profit for the period 17,204 12,866 30,553 Currency retranslation (11,552) (13,813) (10,507) -------------------------------------------------------------------------------- Total recognised gains and losses for the period 5,652 (947) 20,046 -------------------------------------------------------------------------------- Reconciliation of movement in shareholders' funds Half-year to Half-year to Year to 30th November 30th November 31st May 2003 2002 2003 £000 £000 £000 -------------------------------------------------------------------------------- Total recognised gains and losses for the period 5,652 (947) 20,046 Dividends (3,633) (3,336) (12,329) Purchase of own shares - (10,800) (17,575) -------------------------------------------------------------------------------- Net increase / (decrease) in shareholders' funds 2,019 (15,083) (9,858) Opening shareholders' funds 251,260 261,118 261,118 -------------------------------------------------------------------------------- Closing shareholders' funds 253,279 246,035 251,260 -------------------------------------------------------------------------------- PZ CUSSONS PLC Notes The interim financial statements which are neither audited nor reviewed have been prepared on the basis of the accounting policies set out in the Annual Report and Accounts 2003. These interim financial statements do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The figures for the year ended 31st May 2003 are an abridged statement of the group audited accounts for that year. The audited accounts, containing an unqualified audit report, have been delivered to the Registrar of Companies. Enquires 10th February 2004 PZ Cussons Plc 0161 491 8000 Graham Calder (Between 9.00 am and 5.15 pm) Finance Director Weber Shandwick / Square Mile Terry Garrett / Josh Royston 020 7067 0000 This information is provided by RNS The company news service from the London Stock Exchange

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