Preliminary Results

Paterson Zochonis PLC 11 September 2001 PATERSON ZOCHONIS plc PRELIMINARY ANNOUNCEMENT Highlights * Operating profits before exceptional items increased by 23.7% from £29.8m to £36.9m * Pre-tax profits before exceptional items increased by 10.7% from £39.6m to £43.8m * Earnings per share before exceptional items increased by 11.3% from 50.61p to 56.32p * Net funds increased by 41.2% from £85.6m to £120.9m * Dividend increase for year proposed of 10.5% from 21.5p per share to 23.75p per share Strategy As previously reported the immediate focus for the group has been to improve profit levels and increase cash resources. Over the last two years considerable progress has been achieved in the group's three regions in meeting these objectives by developing the major brands, discontinuing less profitable products and implementing cost reduction and efficiency improvement programmes. These programmes will continue, however, greater emphasis is now being applied to growth, particularly in the key developing markets of Indonesia and Nigeria. Europe The units in the United Kingdom, Poland and Greece have successfully achieved improvements in profitability with an ongoing manufacturing efficiency programme being a large contributory factor. In the UK, there has been an important relaunch of the Imperial Leather range, through an extensive media campaign. The complete range has been repackaged and is being further developed with innovative products emphasising lather delivery. The packaging of the Morning Fresh range has also been radically improved. In Eastern Europe, export sales have expanded, particularly to Russia, however, the Polish market remains difficult. In a very competitive market, emphasis is being given to support and develop the major brands, namely E (detergents), Luksja (soaps), Makler (men's) and Kwiaty Polskie (skin care) and to continue to rationalise certain of the other product ranges. Although tight monetary policy is being maintained in Greece, the development and range extension of our principal Minerva and Horio olive oil brands and Fast margarine have resulted in higher profits this year. Asia Indonesia has increased sales by 40% year on year, with a similar improvement in profit. The major range of Cussons Baby products has continued to expand and the newer ranges of Cussons Kids and Sweet 17 are proving very successful. The unit continues to open new depots and strengthen distribution throughout the vast group of islands which make up the country. Thailand also has performed well in the year through extension of the Imperial Leather range and the successful relaunch of the Cussons Baby range. In Australia, the programme of rationalisation of the product ranges has resulted in a decline in turnover, however, the sales of the principal brands, Radiant, Morning Fresh and Imperial Leather have been strong and profitability has improved. The two smaller units of the region, namely China and the Middle East have had contrasting results with China continuing to be difficult with competition from low cost counterfeit products and the Middle East attaining growth and higher profitability. PATERSON ZOCHONIS plc Africa The economic and political position in Nigeria has continued to be positive and the results for the unit have shown some improvement after a number of years of decline. Considerable group resource is now being given to assist in the development of the locally manufactured brand ranges in soap, detergents and pharmaceutical and cosmetic products. With the successful completion of the rights issue early in the year, a programme of improvements to increase capacity in the four Nigerian factories is now underway. An agreement has now been signed with Haier, a large international manufacturer of white goods based in China, to manufacture refrigerators and air conditioners through a new joint venture company in the Thermocool factory. The new range has been well received in the market. Results in the other African units, Ghana, Kenya and Cameroun are stronger than last year. Investments Cash flow has continued to be positive, through higher profitability and reductions in working capital. In the year net funds have increased from £85.6m to £120.9m, after spending £7.5m on the share buy back programme, and net interest receivable has increased by £4.7m. In the previous year, investment gains were large, when profits were taken on the portfolio taking opportunity of the high level of world stock markets. In the current year, the recent uncertainty in the markets, has adversely affected performance. Purchase of own shares The company has successfully purchased its own shares through the market in recent months with the objective of improving earnings per share. To date 5.6% of the ordinary shares and 10% of the 'A' ordinary shares have been purchased and it is proposed to ask shareholders for authority to purchase up to a further 15% of the shares now in issue. Dividend With continuing improvements in profitability and increases in net funds, the board is recommending a dividend increase of 10.5%. Outlook Focus will continue on improving operating margins and developing innovative new products to extend and expand our major brands. There has been an encouraging start to the financial year, although the eventual outcome will inevitably be somewhat dependent on world economic trends. Longer term there are real opportunities for growth, particularly in our major developing markets of Nigeria and Indonesia where we are now experiencing more political and economic stability. PATERSON ZOCHONIS plc Consolidated Profit and Loss Account for the Year to 31st May 2001 2001 2000 £000 £000 Turnover 406,062 409,074 ======= ======= Operating profit before exceptional income 36,859 29,796 Exceptional income - 5,979 -------- ------- Operating profit 36,859 35,775 Net investment income / interest payable 6,935 9,760 -------- ------- Profit on ordinary activities before taxation 43,794 45,535 Taxation on profit on ordinary activities (13,564) (13,903) -------- ------- Profit on ordinary activities after taxation 30,230 31,632 Equity minority interests (2,973) (2,667) -------- ------- Profit for the financial year 27,257 28,965 Preference dividends (770) (770) -------- ------- Profit attributable to ordinary capital 26,487 28,195 Ordinary dividends (10,858) (10,201) -------- ------- Profit for the financial year retained £15,629 £17,994 ======= ======= Basic earnings per ordinary share after exceptional item 56.32p 59.43p Basic earnings per ordinary share before exceptional item 56.32p 50.61p Diluted earnings per ordinary share after exceptional item 56.12p 59.43p Diluted earnings per ordinary share before exceptional item 56.12p 50.61p The results for both years arise from continuing operations PATERSON ZOCHONIS plc Balance Sheets as at 31st May 2001 The group Parent company 2001 2000 2001 2000 £000 £000 £000 £000 Fixed assets Intangible assets: Goodwill 511 539 - - Negative goodwill (2,519) - - - ------- ------- ------- ------- (2,008) 539 - - Tangible assets 167,849 179,873 - - Investments: Subsidiary companies - - 92,559 81,323 Other investments - - - - ------- ------- ------- ------- 165,841 180,412 92,559 81,323 Current assets Stocks 92,066 92,906 - - Debtors 55,585 56,142 41,668 54,311 Investments 131,290 102,388 40,101 43,474 Cash at bank and in hand 8,586 10,799 - - ------- ------- ------- ------- 287,527 262,235 81,769 97,785 Creditors - amounts falling due within one year (119,342) (112,735) (46,710) (37,405) ------- ------- ------- ------- Net current assets 168,185 149,500 35,059 60,380 ------- ------- ------- ------- Total assets less current liabilities 334,026 329,912 127,618 141,703 Creditors - amounts falling due after one year (19,206) (19,744) (9,008) (9,625) Provisions for liabilities and charges (10,171) (7,718) - (195) ------- ------- ------- ------- Net assets £304,649 £302,450 £118,610 £131,883 ========= ========= ======== ======== Capital and reserves Equity ordinary share capital 4,555 4,744 4,555 4,744 Non-equity preference share capital 7,898 7,898 7,898 7,898 ------- ------- ------- ------- Total called up share capital 12,453 12,642 12,453 12,642 Reserves attributable to equity interests: Capital redemption reserve 189 - 189 - Revaluation reserve 43,688 46,911 - - Profit and loss account 205,393 197,770 105,968 119,241 ------- ------- ------- ------- Total shareholders' funds 261,723 257,323 118,610 131,883 Equity minority interests 42,926 45,127 - - ------- ------- ------- ------- £304,649 £302,450 £118,610 £131,883 ========= ========= ======== ======== PATERSON ZOCHONIS plc Group Cash Flow Statement 2001 2000 £000 £000 Cash flow from operating activities 66,705 72,321 Returns on investments and servicing of finance 5,067 6,604 Taxation (14,454) (9,124) Capital expenditure and financial investment (4,773) (6,869) Acquisitions and disposals 1,488 (5,133) Equity dividends paid (10,305) (9,394) -------- -------- Cash inflow before use of liquid resources and financing 43,728 48,405 Management of liquid resources (29,649) (15,555) Financing (14,561) (24,119) -------- -------- (Decrease) / increase in cash in the period £(482) £8,731 ======== ======== 2001 2000 £000 £000 Reconciliation of net cash flow to movement in net funds (Decrease) / increase in cash in the period (482) 8,731 Cash outflow from financing 6,723 24,119 Cash outflow from management of liquid resources 29,649 15,555 ------- ------- Change in net funds resulting from cash flows 35,890 48,405 Currency retranslation (652) 29 Deposits and loans in former associate now consolidated as a subsidiary - 8,263 ------- ------- Movement in net funds in the period 35,238 56,697 Opening net funds 85,623 28,926 ------- ------- Closing net funds £120,861 £85,623 ========= ========= PATERSON ZOCHONIS plc Group Cash Flow Statement continued Analysis of net funds At 31st May Cash Exchange At 31st May 2000 flow difference 2001 £000 £000 £000 £000 Cash in hand and at bank 10,799 (1,892) (321) 8,586 Overdrafts (10,571) 1,410 324 (8,837) ------- (482) Loans due within one year (16,993) 6,723 92 (10,178) Deposits 83,690 24,715 (747) 107,658 Other current asset investments 18,698 4,934 - 23,632 ------- 29,649 ------- ------- ------- ------- £85,623 £35,890 £(652) £120,861 ======== ======= ======== ======== Statement of Total Recognised Gains and Losses 2001 2000 £000 £000 Profit for the financial year 27,257 28,965 Currency retranslation (3,707) (7,474) Reversal of taxation on Nigeria revaluation surplus - 1,765 ------- ------- Total recognised gains and losses for the year £23,550 £23,256 ======= ======= PATERSON ZOCHONIS plc NOTES 1. Segmental reporting Third party Profit before turnover taxation 2001 2000 2001 2000 £000 £000 £000 £000 Geographical areas - by origin Europe 198,092 203,482 16,296 12,752 Asia 88,247 84,660 5,907 3,895 Africa 119,723 120,932 14,656 13,149 ------- ------- ------- ------- £406,062 £409,074 36,859 29,796 Net investment income / interest payable 6,935 9,760 ------- ------- 43,794 39,556 Exceptional item - 5,979 ------- ------- £43,794 £45,535 ======= ======= 2.AGM and dividend The board is recommending a final dividend of 17.25p per share which, together with the interim dividend of 6.50p gives a total distribution of 23.75p, an increase of 10.5% over the total of 21.5p last year. The date of the annual general meeting has been fixed for Monday November 5th 2001 and dividend warrants in respect of the proposed final dividend, subject to shareholders' approval, will be posted on that day to members on the register at 5.00 pm on 5th October 2001. 3.Basis of accounts The 2001 results are an abridged version of the statutory accounts for the year ended 31st May 2001 which have been approved by the board of directors and which carry an unqualified audit report. The 2000 results are an abridged version of the statutory accounts for the year ended 31st May 2000 which carry an unqualified audit report and which have been filed with the Registrar of Companies. Neither accounts contain a statement in respect of s.237(2) or (3) of the Companies Act 1985. Enquiries 11th September 2001 Paterson Zochonis plc 0161 491 8000 Graham Calder (Between 9.00 am and 5.15 pm) Finance Director Square Mile BSMG 020 7601 1000 Terry Garrett

Companies

PZ Cussons (PZC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today