Mcbride Regulatory News (MCB)

7 Feb 2008 07:01

McBride PLC07 February 2008 McBride plc 7 February 2008 McBride plc, Europe's leading supplier of private label household and personalcare products, announces its Half Year Report for the six months ended 31December 2007 • Revenue up 23% to £342.9m (2006: £278.2m) driven by recentacquisitions • Adjusted operating profit was £16.0m (2006: £16.4m)(1); reportedoperating profit was £13.5m (2006: £16.3m) • Adjusted basic earnings per share were 5.6 pence (2006: 6.3p) (1);reported basic earnings per share were 4.6 pence (2006: 6.3p) • Interim dividend per share maintained at 1.7 pence (2006: 1.7p) • Net debt of £102.6m as at 31 December 2007, an increase of £21.7m inthe six month period (1) Adjusted operating profit and adjusted basic earnings per share arecalculated before amortisation of intangible assets and exceptional items Miles Roberts, Chief Executive, commented: "We have experienced, mainly in the second quarter of the first half,unprecedented increases in our raw material costs. These cost increases havebeen partially mitigated by continuing improvements in operational efficiencies,purchasing and value engineering. Additionally, we have been discussing priceincreases with our customers and, to date, a significant proportion of thesecost increases have been recovered. The inevitable time lag between cost andselling price increases has impacted margins. Trading since the end of December has been in line with our expectations. TheBoard recognises that the Company still needs to fully mitigate its costpressures and the measures it has taken to secure the necessary cost recoveriesare well in hand". For further information please contact: McBride plc 01494 607050Miles Roberts, Chief ExecutiveStuart Miller, Interim Finance Director Financial Dynamics 020 7831 3113Andrew Dowler McBride is Europe's leading provider of Private Label Household and PersonalCare products, supplying over 1.3 billion products each year to Europe's leadingretailers. It employs over 5,000 people in 11 European countries. For moreinformation, visit www.mcbride.co.uk Overview Overall the group delivered a resilient performance in the face of unprecedentedincreases in raw materials costs and competitive trading conditions in the twomain household products markets in the UK and France. • Recovery of increased raw materials costs through selling priceincreases commenced and continues into the second half • Continue to seek opportunities to improve efficiencies and ensure theoptimum asset base for the Group's future development • Recent acquisitions deliver good trading performance • Total revenue up 23% to £342.9m (2006: £278.2m). Organic(1) revenuedeclined 1% with personal care growing 6% • Adjusted Group operating profit was £16.0m (2006: £16.4m), reflectingincreased raw materials costs partially mitigated by operational efficiencies,purchasing savings and the contribution from recent acquisitions • In the UK, total revenue was up 13% to £151.8m (2006: £134.6m).Adjusted operating profit declined 26% to £9.2m (2006: £12.4m) • The Western Continental Europe business delivered a resilientperformance, with total revenue up 36% to £188.2m (2006: £138.3m), reflectingstrong contributions from recent acquisitions. Adjusted operating profitimproved 59% to £6.2m (2006: £3.9m) driven by the recent acquisitions • Eastern Continental Europe is continuing to benefit from buoyanttrading conditions with revenues up 38% to £16.3m (2006: £11.8m) and adjustedoperating profit up 25% to £1.0m (2006: £0.8m) (1) Organic refers to the results of underlying businesses at constant currency,excluding the effect of acquisitions Current trading and outlook Trading since the end of December has been in line with our expectationsalthough the second half remains challenging. We will continue to make McBride a more robust business by rigorous execution inour existing businesses and increasing our exposure to more attractive productcategories and geographies. UK business review The UK household products market is relatively mature with modest overall growthin value terms driven by innovation and momentum in selected product categoriessuch as automatic dishwashing and air care. Private label has maintained amarket share of around 20% in recent years with actual Private Label salesdeclining by 2% in the period to December 2007. In personal care, the total UK market grew by 5% in value in the year toDecember 2007 whilst private label grew well ahead of the market. Productcategories showing good growth were skin care, liquid soap, mouthwash anddeodorants. Private label's value share of the market was 19% in the year toDecember 2007. McBride's UK business increased total revenue by 13% to £151.8m (2006: £134.6m)driven by the contribution from the recent acquisitions of Henkel's UK privatelabel household products business and Darcy Industries as well as organic growthof 8% in personal care. Adjusted operating profit declined by 26% reflecting material cost inflation. Tocounter the cost inflation, we have commenced various initiatives to improveperformance including achieving operational efficiencies, rationalisation andobtaining price increases from our customers. (Source of market data: McBride estimates based on Taylor Nelson Sofres retailselling price data) Western Continental Europe business review France is McBride's largest market in Western Continental Europe. The overallhousehold products and personal care markets have continued their recent trendof modest growth. In the year to November 2007 these markets recorded 1% growthand 1% decline respectively. However, private label has continued its recentoutperformance against the overall market, recording 6% and 4% growth inhousehold products and personal care respectively in the year to November 2007.Growth in household products, for both the overall market and private label, wasconcentrated in categories such as washing up liquid, automatic dishwashingproducts and air care. In addition, private label performed well in a weakoverall laundry market. In personal care, the market has been driven by strongperformances in bath and shower products, soap products and deodorants. In Italy, McBride's second largest market in Western Continental Europe, thetotal household products market has been growing at an annual rate of 3-4% overthe last 2 years. Growth in the overall market has been driven particularly bythe laundry liquid and automatic dishwashing product categories. Private labelhas shown consistent value growth in recent years and its growth has acceleratedrecently, from 2% in the year to December 2006 to 6% in the year to December2007 driven by strong performances in laundry liquid, up 25%, washing up liquid,up 11%, and household cleaners, up 5%. McBride's third largest market in Western Continental Europe, Spain, has alsocontinued its recent strong growth with the household products market deliveringoverall growth of 6% and private label growth of 7% in the year to December2007. This growth was driven by strong performances in categories such aslaundry liquid, automatic dishwashing products, household cleaners and air care. McBride's Western Continental Europe business increased total sales by 36% to£188.2m (2006: £138.3m) reflecting the contribution of the acquisitions ofHenkel's private label household products business in Continental Europe andDasty Italia. Dasty Italia has performed particularly well, capitalising onstrong market conditions in Italy. Personal care as well as household productsin Italy and Spain continued to deliver good organic growth but our main Frenchhousehold products business experienced difficult trading conditions. Underlyingorganic revenue reduced 1% reflecting a 2% decline in household and 6% growth inpersonal care. Adjusted operating profit increased by 59% reflecting the contribution from theacquisitions of Henkel's private label business in Western Europe and DastyItalia. The acquisitions bring significant additional strength to the businesswith their strong positioning in two of our growth product categories -automatic dishwashing and household cleaners. In addition, we have continued tomake progress in improving the operational and financial performance of theunderlying business. Nevertheless recent raw materials cost inflation has madeit necessary to obtain price increases from customers. (Source of market data: IRI retail selling price data with data for Italy forthe whole market and for France and Spain including supermarkets andhypermarkets but not the hard discount sector) Eastern Continental Europe business review The household and personal care markets of Eastern Continental Europe havedemonstrated dynamic growth in recent years. This attractive environment isexpected to remain in place for the foreseeable future, supported by a positivemacro-economic outlook, growing consumer affluence and the rapid expansion ofdiscounters and international retailers in the region. McBride recently enhanced the resources committed to this business with theappointment of a new senior management team. The process of strengthening thebusiness continues with the aim of this region becoming a more significantcontributor to overall Group performance. We are already seeing the expectedbenefits from this investment with strong organic revenue growth delivered inthe period. As well as driving further expansion of our core Eastern Continental Europebusiness in Poland, we have started to see increased activity further east andsouth across the region. Total revenue in Eastern Continental Europe increased 38% to £16.3m (2006:£11.8m). Adjusted operating profit increased 25% with the benefits of strongrevenue growth offsetting higher raw material costs and investment in people. Group financial review Revenue Group revenue increased 23% to £342.9m (2006: £278.2m), with the acquisitions ofDasty Italia, Henkel's European private label household products business andDarcy contributing substantially the whole increase. There was a favourable 1%exchange rate impact from the strengthening Euro which was offset by a 1%reduction in organic revenues. The reduction in organic revenues reflects a 3%decline in household products and a 6% increase in personal care. UK revenues increased 13% to £151.8m (2006: £134.6m), with 15% (£20.2m) fromacquisitions and a 2% organic reduction. Western Continental Europe's revenuesimproved 36% to £188.2m (2006: £138.3m), representing a 35% first timecontribution from acquisitions and 2% exchange benefit partially offset by a 1%reduction in organic, primarily French household. Eastern Continental Europe'srevenues improved 38% to £16.3m (2006: £11.8m), reflecting increases in bothhousehold and personal care. Operating profit Group operating profit, before amortisation of intangible assets and exceptionalitems ('adjusted operating profit'), declined 2% to £16.0m (2006: £16.4m). Theoperating margin reduced from 5.9% to 4.7% reflecting a significant increase inmaterials, fuel and other input costs, and higher administrative costs mainlydue to acquisitions, partially offset by operational efficiencies and purchasingsavings. Administrative costs, before amortisation of intangible assets and exceptionalitems, increased 28% to £74.2m (2006: £57.9m), with 18% of the increase fromacquisitions and 2% from exchange rate movements. The remaining 8% reflects bothvolume increases generated from other bolt on acquisitions made in 2006/07,mainly in the UK, and an increasing focus on product development. UK adjusted operating profit declined 26% to £9.2m (2006: £12.4m) and theoperating margin declined from 9.2% to 6.1%. In Western Continental Europe,adjusted operating profit increased 59% to £6.2m (2006: £3.9m) and the marginimproved from 2.8% to 3.3%, helped by an above average return from the Dastyacquisition. In Eastern Continental Europe, adjusted operating profit improved25% to £1.0m (2006: £0.8m) although the margin reduced from 6.8% to 6.1%,impacted by high material costs. Finance costs Net finance costs increased to £2.3m (2006: £0.7m) reflecting primarily anincreased interest expense arising from higher debt levels to fund theacquisitions completed in 2007. Exceptional items and amortisation of intangible assets There was a £1.7m pre-tax operating exceptional charge to the income statementin the period related to redundancy programmes in the UK, of £1.0m and WesternContinental Europe, of £0.7m. There was a £0.8m amortisation of intangibleassets charge in the period. Profit before tax and tax charge Adjusted profit before tax declined 13% to £13.7m (2006: £15.7m). Reportedprofit before tax declined 28% to £11.2m (2006: £15.6m). The effective tax ratereduced to 27% (2006: 28%). Adjusted profit after tax declined 12% to £10.0m(2006: £11.3m). Earnings per share and dividend Reported basic earnings per share were 4.6p (2006: 6.3p) and diluted earningsper share were 4.5p (2006: 6.1p). Adjusted basic and diluted earnings per share,calculated before amortisation of intangible assets and exceptional items, were5.6p (2006: 6.3p) and 5.5p (2006: 6.2p) respectively. The weighted averagenumber of shares in the period used in calculating basic and diluted earningsper share was 180.0m (2006: 177.1m) and 181.6m (2006: 180.8m) respectively. An interim dividend of 1.7p per share (2006: 1.7p) will be paid on 23 May 2008to shareholders on the register on 25 April 2008. Cash flow and net debt Net cash generated from operations, excluding cashflows relating to exceptionalitems, was £14.6m (2006: £22.3m). The reduced cash flows reflect primarily somesignificant non-recurring payables. The group's overall net cash flow during the period was also affected byincreased interest costs related to the additional debt used to finance recentacquisitions and cash outflows relating to exceptional items. These factorscombined with the translational impact of the stronger Euro on Euro debt,resulted in net debt increasing to £102.6m from £80.9m at 30 June 2007. Balance sheet Net assets were marginally higher at 31 December 2007 at £121.1m compared to£120.3m at 30 June 2007. The pre-tax, before amortisation of intangible assets and exceptional items,return on average capital employed declined from 24.6% to 15.1% reflecting lowerprofitability as well as higher capital employed following acquisitionscompleted in the last 12 months. Responsibility Statement We confirm that to the best of our knowledge: • The condensed set of financial statements has been prepared inaccordance with IAS 34 Interim Financial Reporting as adopted by the EU; • The interim management report includes a fair review of theinformation required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indicationof important events that have occurred during the first six months of thefinancial year and their impact on the condensed set of financial statements;and a description of the principal risks and uncertainties for the remaining sixmonths of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related partytransactions that have taken place in the first six months of the currentfinancial year and that have materially affected the financial position orperformance of the entity during that period; and any changes in the relatedparty transactions described in the last annual report that could do so. The Board The Board of Directors that served during the six months to 31 December 2007 andtheir respective responsibilities can be found on pages 26 and 27 of the McBrideplc Annual Report and Accounts 2007. By order of the Board6 February 2008 INDEPENDENT REVIEW REPORT TO MCBRIDE PLC Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31December 2007 which comprises the consolidated income statement, consolidatedbalance sheet, consolidated cash flow statement, consolidated statement ofrecognised income and expense and the related explanatory notes. We have readthe other information contained in the half-yearly financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the Disclosureand Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to thecompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company for our review work, forthis report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the DTR of the UK FSA. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the EU. The condensed set offinancial statements included in this half-yearly financial report has beenprepared in accordance with IAS 34 Interim Financial Reporting as adopted by theEU. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing (UK and Ireland) and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 December 2007 is not prepared, in allmaterial respects, in accordance with IAS 34 as adopted by the EU and the DTR ofthe UK FSA. KPMG Audit PlcChartered Accountants8 Salisbury SquareLondon EC4Y 8BB 6 February 2008 CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 Note £m £m £m Revenue 3 342.9 278.2 592.0 Cost of sales (230.0) (185.0) (393.0)Gross profit 112.9 93.2 199.0 Distribution costs (22.7) (18.9) (39.7)Administrative costs: Before amortisation of intangible assets and exceptional items (74.2) (57.9) (124.8) Amortisation of intangible assets (0.8) (0.1) (0.5) Exceptional items 4 (1.7) - (2.1)Administrative costs including amortisation ofintangible assets and exceptional items (76.7) (58.0) (127.4)Operating profit 3 13.5 16.3 31.9 Operating profit before amortisation of intangible assets and exceptional items 16.0 16.4 34.5 Financial income 3.2 2.4 4.8Financial expenses (5.5) (3.1) (7.2)Net financing costs (2.3) (0.7) (2.4) Profit before tax 11.2 15.6 29.5Taxation 5 (3.0) (4.4) (8.2)Profit for the period 3 8.2 11.2 21.3 Attributable to:Equity holders of the parent 8.2 11.1 21.2Minority interest - 0.1 0.1Profit for the period 8.2 11.2 21.3 Earnings per ordinary share (pence) 6 Basic 4.6 6.3 11.9 Diluted 4.5 6.1 11.7 Dividends Paid in period (£m) 7.0 6.2 9.2 Paid in period (pence per share) 3.9 3.5 5.2 Proposed (£m) 3.1 3.0 6.9 Proposed (pence per share) 1.7 1.7 3.9 CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited as at as at as at 31 Dec 2007 31 Dec 2006 30 June 2007 Note £m £m £m Non-current assetsIntangible assets 41.2 17.1 41.1Property, plant and equipment 175.2 128.8 164.3Other non-current assets 0.5 0.5 0.5Deferred tax 0.5 4.6 2.6 217.4 151.0 208.5 Current assetsInventories 60.8 48.9 59.7Trade and other receivables 130.0 104.8 130.7Cash and cash equivalents 3.3 2.8 6.6Assets classified as held for sale 1.3 - 1.3 195.4 156.5 198.3Total assets 3 412.8 307.5 406.8 Current liabilities Interest bearing loans and borrowings 19.4 2.6 9.9Trade and other payables 159.7 145.0 173.1Current tax payable 1.8 2.9 1.9Provisions 2.0 0.6 2.0 182.9 151.1 186.9 Non-current liabilities Interest bearing loans and borrowings 86.5 25.3 77.6Pensions and other post-employment benefits 8.1 14.4 8.9Provisions 0.9 0.7 1.6Deferred tax 13.3 7.1 11.5 108.8 47.5 99.6Total liabilities 3 291.7 198.6 286.5Net assets 121.1 108.9 120.3 EquityIssued share capital 18.0 17.8 17.8Share premium account 143.0 141.8 141.8Other reserves 1.3 (0.9) (0.2)Retained earnings (41.2) (50.4) (39.1)Total equity attributable to equity holders of the parent 121.1 108.3 120.3Minority interest - 0.6 -Total equity and reserves 10 121.1 108.9 120.3 CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 Note £m £m £m Profit before tax 11.2 15.6 29.5Net financing costs 2.3 0.7 2.4Pre-tax exceptional charge in the period 1.7 - 2.1 Share based payments - - 0.2 Profit on sale of property, plant and equipment - (0.1) (0.1) Depreciation 10.3 8.3 17.2 Amortisation of intangible assets 0.8 0.1 0.5 26.3 24.6 51.8Decrease/(increase) in receivables 9.5 - (3.8)Decrease/(increase) in inventories 2.0 (7.6) (7.1)(Decrease)/increase in payables (23.2) 5.3 8.6Cash outflow in respect of exceptional items (2.0) (0.5) (1.7)Cash generated from operations 12.6 21.8 47.8Interest paid (6.8) (1.1) (3.3)Taxation paid (2.2) (2.4) (6.3)Net cash from operating activities 3.6 18.3 38.2 Cash flows from investing activitiesProceeds from sale of land and buildings - 0.1 0.1Acquisition of property, plant and equipment (13.4) (8.0) (19.8)Acquisition of intangible assets - - (0.2)Acquisition of businesses, net of cash acquired (0.1) (2.7) (57.8)Acquisition of minority interest - - (1.7)Interest received 0.1 1.3 1.3Net cash used in investing activities (13.4) (9.3) (78.1) Cash flows from financing activitiesProceeds from issue of share capital 1.5 0.7 0.7Repurchase of own shares (1.4) - -Increase in/(repayment of) borrowings 8 9.3 (0.6) 49.3Payment of finance lease liabilities (0.5) (0.2) (0.7)Dividends paid (7.0) (6.2) (9.2)Net cash generated from/(used in) financing activities 1.9 (6.3) 40.1 Net (decrease)/increase in cash and cash equivalents (7.9) 2.7 0.2Cash and cash equivalents at start of period (1.0) (1.3) (1.3)Effect of exchange rate fluctuations on cash held 0.1 (0.1) 0.1Cash and cash equivalents at end of period (8.8) 1.3 (1.0) Reconciliation of cash and cash equivalents per the balance sheet and cash flow statementCash and cash equivalents per the balance sheet 3.3 2.8 6.6Overdrafts (12.1) (1.5) (7.6)Cash and cash equivalents per the cash flow (8.8) 1.3 (1.0)statement CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 Note £m £m £m Foreign exchange translation differences 10.3 (1.0) (1.1)Net (loss)/gain on hedge of net investment in foreignsubsidiaries (9.6) 0.9 0.8Cash flow hedge reserve movement 9 1.1 (0.3) (0.3)Tax on items above taken directly to equity (0.3) - 0.1Actuarial (loss)/gain net of deferred tax - (0.3) 3.1Income and expense recognised directly in equity 1.5 (0.7) 2.6Profit for the period 8.2 11.2 21.3Total recognised income and expense for the period 9.7 10.5 23.9 Attributable to:Equity shareholders of the parent 9.7 10.4 23.8Minority interest - 0.1 0.1 9.7 10.5 23.9 NOTES TO THE INTERIM FINANCIAL STATEMENTS 1) Basis of preparation This Half Year Report has been prepared in accordance with the Disclosure and Transparency Rules of the UnitedKingdom Financial Services Authority. The Half Year Report has been prepared in accordance with IAS 34 'InterimFinancial Reporting' and on the basis of the accounting policies and the recognition and measurementrequirements of IFRS applied in the financial statements at 30 June 2007 and those standards that have beenendorsed and will be applied at 30 June 2008. This report should be read in conjunction with the financialstatements for the year ended 30 June 2007. The results for each half-year are unaudited and do not represent the Group's statutory accounts. Thecomparative figures for the financial year ended 30 June 2007 are not the Group's statutory accounts for thatfinancial year. Those accounts have been reported on by the Group's auditors and delivered to the registrar ofcompanies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters towhich the auditors drew attention by way of emphasis without qualifying their report and (iii) did not containa statement under section 237 (2) or (3) of the Companies Act 1985. Comparative figures for the periods ended31 December 2006 and 30 June 2007 have been restated so as to be consistently presented with those of theperiod end. The interim financial statements were approved by the Board on 6 February 2008. 2) Change in accounting standards IFRS 7 Financial Instruments - Disclosures and the Amendment to IAS 1 Presentation of Financial Statements:Capital Disclosures will both be effective for the Group's 2008 financial statements. Disclosures about thesignificance of financial instruments on the Group's financial position and performance and qualitative andquantitative disclosures on the nature and extent of risks as required by IFRS 7 and capital disclosures asrequired by IAS 1 will be given in the annual financial statements. 3) Segment information Segment information is presented below in respect of the Group's geographic and business segments. Theprimary format, geographic segments, is based on the Group's operating divisions and internal reportingstructure. Transfer prices between segments are set on an arm's length basis. Segment revenue and profitinclude transfers between segments which are eliminated on consolidation. Geographic segments United Kingdom Western Continental Europe 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mExternal revenue 149.2 133.6 274.5 178.1 133.1 292.8Inter-segment revenue 2.6 1.0 2.6 10.1 5.2 11.4Total segment revenue 151.8 134.6 277.1 188.2 138.3 304.2 Segment profit preamortisation of intangibleassets 9.2 12.4 24.5 6.2 3.9 10.4Amortisation of intangibleassets (0.3) (0.1) (0.2) (0.5) - (0.2) Segment profit 8.9 12.3 24.3 5.7 3.9 10.2 Eastern Continental Europe Elimination 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mExternal revenue 15.6 11.5 24.7 - - -Inter-segment revenue 0.7 0.3 0.3 (13.4) (6.5) (14.3)Total segment revenue 16.3 11.8 25.0 (13.4) (6.5) (14.3) Segment profit preamortisation of intangibleassets 1.0 0.8 1.5 - - (0.1)Amortisation of intangibleassets - - (0.1) - - -Segment profit 1.0 0.8 1.4 - - (0.1) Total 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £mExternal revenue 342.9 278.2 592.0Inter-segment revenue - - -Total segment revenue 342.9 278.2 592.0 Segment profit preamortisation of intangible assets 16.4 17.1 36.3Amortisation of intangible assets (0.8) (0.1) (0.5) Segment profit 15.6 17.0 35.8Corporate costs * (0.4) (0.7) (1.8)Exceptional items (see note 4) (1.7) - (2.1) Operating profit 13.5 16.3 31.9Net financing costs (2.3) (0.7) (2.4)Taxation (3.0) (4.4) (8.2)Profit for the period 8.2 11.2 21.3 * Corporate costs relate primarily to head office costs that are not reallocated to one of the geographicsegments. 3) Segment information (continued) United Kingdom Western Continental Europe 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mSegment assets 152.1 127.3 155.4 239.5 161.1 231.9Segment liabilities (74.3) (73.5) (74.8) (124.0) (82.9) (110.9)Capital expenditure 5.6 3.7 9.1 7.4 3.0 9.2Amortisation and depreciation 4.2 3.8 7.7 6.6 4.3 9.5 Eastern Continental Europe Corporate 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mSegment assets 19.5 13.3 15.8 1.7 5.8 3.7Segment liabilities* (6.1) (3.4) (5.0) (87.3) (38.8) (95.8)Capital expenditure* 0.4 1.3 1.7 - - -Amortisation and depreciation 0.3 0.3 0.5 - - - * Corporate liabilities include external debt and tax liabilities. Capital expenditure includes property,plant and equipment and intangible assets. Total 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £mSegment assets 412.8 307.5 406.8Segment liabilities (291.7) (198.6) (286.5)Capital expenditure 13.4 8.0 20.0Amortisation and depreciation 11.1 8.4 17.7 Business segments Household Personal Care 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mSegment revenue 281.6 221.3 476.9 61.3 56.9 115.1Segment profit preamortisation of intangibleassets 12.4 12.2 26.9 4.0 4.9 9.4Amortisation of intangibleassets (0.8) (0.1) (0.4) - - (0.1)Segment profit 11.6 12.1 26.5 4.0 4.9 9.3 3) Segment information (continued) Total 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £mSegment revenue 342.9 278.2 592.0Segment profit preamortisation of intangible assets 16.4 17.1 36.3Amortisation of intangible assets (0.8) (0.1) (0.5)Segment profit 15.6 17.0 35.8Corporate costs* (0.4) (0.7) (1.8)Exceptional items (see note 4) (1.7) - (2.1)Operating profit 13.5 16.3 31.9 * Corporate costs related primarily to head office costs that are not allocated to one of the businesssegments Household Personal Care 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mSegment assets 340.4 231.5 327.2 70.7 70.2 75.9Capital expenditure* 8.5 6.0 12.9 4.9 2.0 7.1 * Capital expenditure includes property, plant and equipment and intangible assets Corporate Total 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mSegment assets 1.7 5.8 3.7 412.8 307.5 406.8Capital expenditure* - - - 13.4 8.0 20.0 * Capital expenditure includes property, plant and equipment and intangible assets External revenue by destination Segmental information is also presented below in respect of external revenue bydestination. Revenue to Switzerland which was previously included as revenue toRest of World has been reclassified in this period, and for comparative periods,as revenue to Western Continental Europe. United Kingdom Western Continental Europe 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mExternal revenue bydestination 142.7 126.8 261.0 171.6 130.1 284.5 Eastern Continental Europe and Rest of Total World 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £m £m £m £mExternal revenue bydestination 28.6 21.3 46.5 342.9 278.2 592.0 4) Exceptional items The Group presents certain items as "exceptional". These are items which, inmanagement's judgement, need to be disclosed by virtue of their size orincidence in order to obtain a proper understanding of the financialinformation. There was a £1.7m pre-tax operating exceptional charge to the income statementin the period relating to redundancy programmes at both UK and WesternContinental Europe divisions. There was a £2.1m pre-tax operating exceptional charge to the income statementin the year ended 30 June 2007 relating to the incremental costs of integratingthe recently acquired businesses of Dasty Italia S.p.A, Henkel's EuropeanPrivate Label household products businesses and other acquisitions, and SanmexInternational acquired in 2006. This includes disruption costs, asset write-offsand consultant costs. In terms of segment analysis in Note 3, the exceptional charge relates to the UK£1.0m (30 June 2007: £0.8m), Western Continental Europe £0.7m (30 June 2007:£0.8m) and Corporate £nil (30 June 2007: £0.5m), on a geographic basis, andhousehold £1.6m (30 June 2007: £1.6m), personal care £0.1m (30 June 2007: £nil)and Corporate £nil (30 June 2007: £0.5m) on a business basis. 5) Taxation The £3.0m tax charge for the half year ended 31 December 2007 (2006: £4.4m) consists of £1.4m (2006: £3.3m) ofUK tax and £1.6m (2006: £1.1m) of overseas tax. The Group's consolidated effective tax rate for the half yearended 31 December 2007 was 27% (2006: 28%). 6) Earnings per ordinary share Basic earnings per ordinary share is calculated on profit after tax and minority interest, attributable toequity holders of the parent, divided by the weighted average number of ordinary shares in issue during theperiod in accordance with IAS 33. 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007Total earnings (£m) a 8.2 11.1 21.2Weighted average number of ordinary shares b 179,960,782 177,144,652 177,405,917Basic earnings per share (pence) a/b 4.6 6.3 11.9 Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issueon assumption of conversion of all dilutive ordinary shares. The Company has three categories of potentiallydilutive ordinary shares: share options issued whose exercise price is less than the average price of theCompany's ordinary shares during the period, share awards with no option price and shares allocated to anapproved Save As You Earn scheme. 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007Weighted average number of ordinary shares (million) b 180.0 177.1 177.4Effect of dilutive share options (million) 0.3 0.3 0.3Effect of dilutive share awards (million) 1.1 0.7 0.8Effect of dilutive SAYE scheme shares (million) 0.2 2.7 2.7 c 181.6 180.8 181.2Diluted earnings per share (pence) a/c 4.5 6.1 11.7 6) Earnings per ordinary share (continued)Adjusted basic earnings per share applies to earnings excluding exceptional items and amortisation of intangibleassets since the directors consider that this gives additional information as to the underlying performance ofthe Group. 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 £m £m £mEarnings used to calculate basic and diluted EPS a 8.2 11.1 21.2Exceptional items after tax 1.2 - 1.5Amortisation of intangible assets after tax 0.6 0.1 0.4Earnings before exceptional items and amortisation ofintangible assets d 10.0 11.2 23.1Adjusted basic earnings per share (pence) d/b 5.6 6.3 13.0Adjusted diluted earnings per share (pence) d/c 5.5 6.2 12.7 The 2006 restatement relates to the adjustment to earnings for amortisation of intangible assets not previouslyincluded. 7) Reconciliation of net cash flow to movement in net debt 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 £m £m £m(Decrease)/increase in cash and cash equivalents in the (7.9) 2.7 0.2periodCash (inflow)/outflow from movement in debt (9.3) 0.6 (49.3)Movement on finance leases 0.5 0.2 0.7Change in net debt resulting from cash flows (16.7) 3.5 (48.4)Lease financing acquired with subsidiary - - (1.2)Loans acquired with subsidiaries - - (2.9)Translation differences (5.0) 0.5 0.7Movement in net debt in the period (21.7) 4.0 (51.8)Net debt at the beginning of the period (80.9) (29.1) (29.1)Net debt at the end of the period (102.6) (25.1) (80.9) 8) Increase in/(repayment of) borrowingsThe net amounts drawn down and repaid during the period were £14.1m (2006: £1.0m) and £4.8m (2006: £1.6m)respectively. 9) Cash flow hedgesDuring the period, the effective portion of changes in the fair value of cash flow hedges was £0.9m (2006:£0.2m loss). The net difference in changes in fair value of cash flow hedges transferred to the incomestatement was £0.2m (2006: £0.1m loss). 10) Fair values on acquisition of Henkel's European Private Label household products businessesOn 13 April 2007, the Group acquired all of the shares of Chemolux S.a.r.l. and the business and assets ofHenkel's UK Private Label household products business. As a result of the proximity of the acquisition date tothe 30 June 2007 year end, the fair value of the Henkel identifiable assets and liabilities were prepared on aprovisional basis. In accordance with IFRS 3 Business Combinations, management has one year from the date ofacquisition to finalise these fair values. 11) Reconciliation of movement in equity and reserves Issued Share Total equity share premium and Other Retained Minority capital account reserves earnings Total interest reserves £m £m £m £m £m £m £mAt 1 July 2006 17.7 141.8 (0.8) (55.2) 103.5 0.4 103.9Profit for the period - - - 11.1 11.1 0.1 11.2Movement in cash flowhedge - - (0.3) - (0.3) - (0.3)Actuarial loss net ofdeferred tax - - - (0.3) (0.3) - (0.3)Foreign exchangetranslation differences - - (1.0) - (1.0) 0.1 (0.9)Net gain on hedge of netinvestment in foreignsubsidiaries - - 0.9 - 0.9 - 0.9Treasury shares issuedto satisfy employeeshare option exercises* 0.1 - - 0.7 0.8 - 0.8Equity dividends - - - (6.2) (6.2) - (6.2)Other movements - - 0.3 (0.5) (0.2) - (0.2)At 31 December 2006 17.8 141.8 (0.9) (50.4) 108.3 0.6 108.9Profit for the period - - - 10.1 10.1 - 10.1Actuarial gain net ofdeferred tax - - - 3.4 3.4 - 3.4Foreign exchangetranslation differences - - (0.1) - (0.1) (0.1) (0.2)Net loss on hedge of netinvestment in foreignsubsidiaries - - (0.1) - (0.1) - (0.1)Equity dividends - - - (3.0) (3.0) - (3.0)Acquisition of minorityinterest - - 1.2 - 1.2 (0.5) 0.7Other movements - - (0.3) 0.8 0.5 - 0.5At 30 June 2007 17.8 141.8 (0.2) (39.1) 120.3 - 120.3Profit for the period - - - 8.2 8.2 - 8.2Movement in cash flowhedge - - 1.1 - 1.1 - 1.1Foreign exchangetranslation differences - - 10.3 - 10.3 - 10.3Net loss on hedge of netinvestment in foreignsubsidiaries - - (9.6) - (9.6) - (9.6)Own shares acquired andheld as Treasury shares** (0.1) - 0.1 (1.4) (1.4) - (1.4)Shares issued to satisfyemployee share optionexercises*** 0.3 1.2 - - 1.5 - 1.5Equity dividends - - - (7.0) (7.0) - (7.0)Tax on items takendirectly to equity - - (0.3) (1.9) (2.2) - (2.2)Other movements - - (0.1) - (0.1) - (0.1)At 31 December 2007 18.0 143.0 1.3 (41.2) 121.1 - 121.1 * 1.0 million ordinary 10p shares were issued out of Treasury for aconsideration of £0.7m in order to satisfy the exercise of employee shareoptions. ** 0.8 million ordinary 10p shares were repurchased by the Company for £1.4m tobe held as Treasury Shares for the expected future exercise of employee shareoptions. *** 3.3 million ordinary 10p shares were issued for £1.5m to satisfy the Save AsYou Earn savings scheme that matured in August 2007. Financial calendar for the year ending 30 June 2008 DividendsInterim Announcement 7 February 2008 Payment 23 May 2008Final Announcement September 2008 Payment November 2008ResultsInterim Announcement 7 February 2008Preliminary statement for full year Announcement September 2008Report and Accounts Circulated September 2008Annual General Meeting To be held October 2008 Exchange rates The exchange rates used for conversion to sterling were as follows: 6 months to 6 months to Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 Average rate: Euro 1.44 1.48 1.48 Polish Zloty 5.38 5.77 5.74 Czech Koruna 39.6 41.7 41.8 Hungarian Forint 364.6 396.6 384.2 Closing rate: Euro 1.36 1.48 1.49 Polish Zloty 4.90 5.68 5.59 Czech Koruna 36.2 40.9 42.7 Hungarian Forint 344.2 373.1 365.0 This information is provided by RNS The company news service from the London Stock Exchange