Last checked at 4 Sep 2008 07:00
4 September 2008
McBride plc
McBride plc, Europe's leading provider of Private Label Household and Personal Care products, announces its preliminary results for the year ended 30 June 2008
Revenue up 18% to £700.9 million (2007: £592.0m) reflecting a full year effect of prior year acquisitions and favourable currency exchange rate movements
Adjusted operating profit(1) was £27.0 million (2007: £34.5m); reported operating profit was £21.4 million (2007: £31.9m)
Adjusted diluted earnings per share(1) was 8.6 pence (2007: 12.7p); reported diluted earnings per share was 6.3 pence (2007: 11.7p)
Proposed final dividend of 3.9 pence (2007: 3.9p), making a total for the year of 5.6 pence (2007: 5.6p)
Maintained strong cash generative characteristics with net cash generated from operations, before exceptional items, of £49.4 million (2007: £49.5m)
Year end net debt of £103.3 million (2007: £80.9m) with the increase due mainly to a strengthening of the Euro against Sterling
Adjusted operating profit and adjusted diluted earnings per share are calculated before amortisation of intangible assets and exceptional items
Iain Napier, Chairman, commented on the results:
"We have produced a robust performance and continued to implement our chosen strategy in very difficult markets."
Miles Roberts, Chief Executive, said:
"The year to June 2008 was dominated by the need to manage the impact of unprecedented input cost inflation. Given the severity of the environment, selling price increases were necessary across most products for the first time in many years.
We have made a satisfactory start to the new financial year. We continue to be the leading provider of Private Label Household and Personal Care products in Europe. We are also maintaining our intense focus on product development, customer service and driving operational efficiencies so that we remain the partner of choice for all our customers. In particular, we have announced a reconfiguration of our UK production facilities to drive further cost improvements.
Our products deliver outstanding value and quality to consumers across Europe and have never been more relevant than in the current environment where disposable incomes are under significant pressure. We are confident in the opportunities ahead for the business."
For further information please contact:
| McBride plc | 020 7539 7850 |
| Miles Roberts, Chief Executive | |
| Ian Johnson, Group Finance Director | |
| Financial Dynamics | 020 7831 3113 |
| Andrew Dowler |
Overview
The business made satisfactory progress in many areas although ultimately the significant increase in our input costs, driven by the sharp rise in the oil price, shaped our financial performance in the year. In particular, whilst firm action was taken to obtain selling price increases, the time lag and the associated business disruption adversely impacted overall growth and profitability. As a result, our financial performance in the year fell below our original expectations.
Revenues were up in all three divisions reflecting primarily full year contributions from prior year acquisitions and strengthening of the Euro and Polish Zloty against Sterling.
Organic(1) revenue declined 2% overall substantially as a result of reduced promotional activity which was a direct consequence of our price increases. Personal Care grew revenue organically by 5%, continuing its strong performance of recent years.
Prior year acquisitions delivered a robust performance reflecting their strength in the Group's identified priority product categories and targeted geographic markets and distribution channels.
In addition to selling price increases, product development combined with significant procurement savings mitigated the impact of input cost inflation.
The Group has continued to identify and implement efficiencies in its cost base, and has recently commenced a significant reconfiguration of its UK manufacturing capabilities which, on completion, will deliver lower costs. We will actively pursue similar initiatives as we seek to strengthen further our competitive position.
Continued strong cash generative characteristics with net cash generated from operations, before exceptional items, of £49.4 million (2007: £49.5m)
In the UK, revenue increased 7% to £297.3 million (2007: £277.1m) reflecting an initial full year contribution from prior year acquisitions partially offset by declining organic Household products revenue. Operating profit, before amortisation of intangible assets and exceptional items, was £15.2 million (2007: £24.5m), reflecting the time lag between cost increases and mitigating actions and lower organic Household product volumes due to lower promotional activity.
In Western Continental Europe, revenue increased 30% to £395.4 million (2007: £304.2m) primarily reflecting the contribution of prior year acquisitions and exchange rate movements. Operating profit, before amortisation of intangible assets and exceptional items, was up 10% to £11.4 million (2007: £10.4m) with robust initial full year contributions from prior year acquisitions more than offsetting a decline in the organic business.
In Eastern Continental Europe, revenue increased 28% to £32.1 million (2007: £25.0m) due mostly to organic growth and exchange rate movements. Operating profit, before amortisation of intangible assets and exceptional items, was up 40% to £2.1 million (2007: £1.5m).
The term 'organic' describes business performance on a comparable basis, excluding the impact of business acquisitions and exchange rate movements.
The industry, market and competitive environment
The Household and Personal Care markets in which McBride operates are large and dynamic with their long term growth driven by levels of disposable income, the rate of household formation and new product innovations that reflect lifestyle changes or deliver improved performance or greater convenience.
The industry is highly competitive, with McBride competing, as a well established leading provider of Private Label products, in partnership with its customers, with a small number of major multinational branded companies. We also compete with a large number of small and generally local Private Label companies. McBride differentiates itself mainly through its focus on Private Label category development, higher growth categories, new product development and strong operational efficiency and procurement capabilities that enable it to deliver outstanding value products to its customers and ultimate consumers.
The Private Label segment of the European Household and Personal Care markets has generally outperformed overall market growth as a result of consolidation in the retail sector and the increasing focus of major retailers on differentiating their offer through their own brand product portfolio. It also reflects growing consumer recognition of the quality and value of Private Label products as well as the significant success of the discount format across Europe where Private Label is often the only product format on sale.
In Western Europe, the Household and Personal Care markets had a combined value of £48 billion (at retail selling prices) in 2007 and they grew at 0.8% and 3.0% per annum respectively in the five years to the end of 2007. McBride's specific Private Label markets have consistently outperformed the overall Household and Personal Care markets, growing by 2.2% and 3.4% per annum respectively in the five years to the end of 2007 across Western Europe.
Within Household products, McBride's targeted product categories continue to outperform the overall market. Automatic dishwashing products have delivered consistently strong growth - 7.2% per annum across Western Europe in the five years to 2007 - driven by the trend of increasing penetration of automatic dishwashing machines in homes. Similar trends have been seen in McBride's other targeted Household categories of specialist cleaners, laundry liquids and air care.
Eastern Europe is experiencing strong growth in both the Household and Personal Care markets which had a combined value of £12 billion (at retail selling prices) in 2007. Over the five years to the end of 2007, these markets grew at 8.9% per annum, the high growth reflecting increasing disposable incomes and consumer affluence and greater product availability driven by retail consolidation.
(Source of market data: Euromonitor)
Business performance
Geographic and product performance
The year saw contrasting fortunes across the Group's geographic and product activities. Significantly, the Group's established strategic priorities of Eastern Europe, Personal Care and selected Household product categories continued to see strong performance.
In Eastern Continental Europe organic revenue growth to our core retail customers was 16%. The key organic growth drivers were very strong performances in territories such as Hungary and the Czech Republic combined with successful new product innovation, continued aggressive store opening programmes by major customers and their focus on Private Label.
We also made good progress in Personal Care, achieving 5% organic revenue growth in the year, meaning that our Personal Care business has achieved compound annual organic revenue growth of 8% in the last 3 years. Growth was broad based across all three divisions and in terms of product categories, with Western Continental Europe achieving 8% organic growth and superior growth occurring in hair care. Our performance also benefited from some key new customer wins and our expansion into premium product segments.
Our identified growth Household product categories of automatic dishwashing tablets, specialist cleaners, laundry liquids and air care continued to outperform our overall Household products organic revenue growth. The main area of weakness was Household products in our UK and French markets. This was attributable to a number of factors including reduced promotional activity during pricing negotiations that had a consequential effect on volumes, overcapacity and declining demand in certain categories such as laundry powder.
Raw materials
McBride entered the year with concerns about the input cost environment but the subsequent speed and severity of inflation in these costs meant that achieving selling price increases became a key priority for the business whereas historically we have generally been able to absorb input price rises through productivity gains and value engineering.
Efficiency gains
During the year, we continued to make incremental gains from improved efficiencies; for example, automation of our production facilities. We have also initiated a programme to reconfigure our manufacturing capabilities in the UK as we extend the integration of prior year acquisitions. We recently purchased a modern, well-invested production facility in St Helens into which we will be transferring production from facilities in Coventry and Warrington. This will result in the closure of our facility in Coventry and the downsizing of the site at Warrington. This project is expected to deliver overhead savings of approximately £1 million per annum from the latter part of the current financial year with anticipated one off costs, to be charged in the same year, of approximately £2 million, primarily related to redundancies and remaining property lease obligations.
Building on our experience since opening an office in Hong Kong in 2006, we recently commissioned a small factory in Guangdong, China that will focus initially on production of air care products for sale in Europe. This facility will bring efficiencies from low cost production and should enhance our competitive positioning in this attractive product category.
Value engineering
Value engineering is a permanent feature of our product development activities and consistent with our commitment to minimise our impact on the environment. During the year, we increased our investment in this area which, for example, enabled us to significantly reduce costs through product reformulation and 'lightweighting' of product containers.
Procurement
Our procurement activities have been significantly strengthened in recent years resulting in a more global and centralised approach that was critical to the Group's performance during the year.
Recent acquisitions
In the prior year, the Group made a number of acquisitions, including Dasty Italia, Darcy Industries and Henkel's European Private Label Household products business. The acquisitions added substantial capability in the Household growth product categories of automatic dishwashing tablets and specialist cleaners. Dasty Italia also materially strengthened our position in the rapidly growing Italian Private Label market. The overall performance of these acquisitions has been fully in line with our expectations, validating not only our growth product category focus but also the Group's ability to identify and implement complementary acquisitions successfully. We have an outstanding query in respect of one acquisition that may be the subject of a formal claim by us in due course.
Customer service
Customer service is our main operational priority and a highly visible benchmark that influences directly our ability to maintain commercial leadership and support the Group's overall growth strategy. We measure our success in this area by reference to success in delivering products ordered by customers in the correct volumes and within agreed timescales. Our customer service level across the Group in the year was 96% (2007: 97%) with the reduction from the prior year driven exclusively by operating a number of Personal Care sites at overcapacity. The new site at St Helens creates new capacity to address this issue.
New product development
We are encouraged by the pipeline of exciting new product developments in the year which should support McBride's overall growth strategy. Key initiatives have been focused on the environmental performance of our products. Notable developments included the launch of new phosphate-free laundry and automatic dishwashing tablets which will make a major contribution to reducing phosphates in domestic waste water. We are also in the process of launching a household trigger cleaner range with a patented soluble sachet refill which can more than halve packaging waste. In addition, we have launched a range of super concentrated liquids in both laundry and dishwashing categories.
Performance against objectives
A year ago, we established a number of key objectives for the year to 30 June 2008 and below we report on the progress made against these objectives.
Improve customer partnership and service, category development and product innovation
Notwithstanding the cost pressures, we have continued to invest in new products and more efficient and effective formulations. We also continue to seek to reduce the environmental impact of our products through decreased use of certain ingredients, such as phosphates, and reduced packaging, for example, the use of refill sachets and 'lightweighting' of product containers.
Deliver improvements in efficiency and reduction in costs
A number of programmes to improve efficiency and reduce costs were implemented or commenced during the year including increased internal bottle blowing, the UK manufacturing reconfiguration referred to above and commissioning our new air care production facility in China. In addition, excluding the impact of prior year acquisitions, energy consumption fell by 2%.
Target our identified growth product categories
Our growth product categories are automatic dishwashing tablets, specialist cleaners, laundry liquids, air care and Personal Care that delivered 1% organic revenue growth compared to a 2% decline in organic revenue for the Group.
Further improve performance in Western Continental Europe
Our Western Continental Europe business benefited from the full year impact of the acquisitions of Dasty Italia and Henkel's European Private Label Household products business. These acquisitions, together with other actions, enhanced the business mix towards our targeted growth categories.
Accelerate growth in Eastern Continental Europe
McBride's Eastern Continental Europe business had a good year with reported revenue increasing 28% to £32.1 million (2007: £25.0m). This compares with reported revenue growth in the previous year of 14%. More importantly, organic revenue growth remained robust at 8% or 16% in our core retail sales activities. The key organic growth drivers were very strong performances in territories such as Hungary and the Czech Republic combined with successful new product innovation and continued aggressive store opening programmes by major customers.
Take advantage of further suitable acquisition opportunities
During the year we continued to consider acquisitions that are consistent with our product and geographic priorities although ultimately none were pursued, primarily reflecting recent macroeconomic uncertainties and value expectations. We expect to return more actively to the acquisition agenda once these concerns subside.
Board
A number of changes to the composition of the board were announced during the year. Bob Beveridge resigned in May 2008 although he remains with the Group as company secretary. Since the year end we have welcomed Ian Johnson to the Board as our new finance director. In addition, we announced that Henri Talerman will be standing down as a non-executive director with effect from the forthcoming Annual General Meeting after 15 years on the Board. Our thanks go to Bob and Henri for their contributions to the Board.
People
Significant demands were placed on many of our employees during the year and their response to the challenges has been exemplary. There have been many outstanding contributions during the year and a few examples are acknowledged below:
the resources and dedication of the many people engaged in alleviating the significant input cost inflation we have had to address including our production and technical teams in pursuing efficiency and value engineering opportunities;
our procurement team's success in accessing new raw materials sources and adopting novel purchasing strategies;
significant work on acquisition integration including IT and managing production transfers from outside as well as between Group sites, particularly in Western Continental Europe; and
delivering significant investment projects such as the acquisition of a new site in St Helens, the bottle blowing project in our Ieper Personal Care factory and establishing our manufacturing facility in China.
Our people are critical to the continued success of McBride and thanks go to all for their continuing commitment to the Group's development during a challenging year.
Objectives for the current year and outlook
The critical objective for the current year is to continue to manage the impact of volatility in input costs.
With the UK manufacturing reconfiguration underway, we are also stepping up our focus on driving down our cost base and enhancing efficiency across the Group.
We will also drive growth in priority categories and geographies and continue to focus on new product development.
We have made a satisfactory start to the new financial year. We continue our strategy to be the leading provider of Private Label Household and Personal Care products in Europe. We are also maintaining our strong focus on product development, customer service and driving operational efficiencies so that we remain the partner of choice for all our customers.
UK business review
Markets
The UK Household products market is relatively mature. Long-term shifts in demand are taking place including a trend towards concentrated laundry liquids and fabric conditioners as well as compacted powders which, whilst being higher value products, have contributed to 2% lower volumes for the market as a whole in the year to June 2008. In the same period, the total UK market increased by 1% in value terms, driven by inflation.
Private Label performed behind the market, reflecting lower promotional activity in the year, with declines in value and volume terms of 3% and 4% respectively. The best performing categories by value in Household products were laundry liquids, fabric conditioners, specialist cleaners and automatic dishwashing tablets, broadly consistent with McBride's identified growth product categories.
In the product categories where McBride has a significant presence, the overall UK Personal Care market grew by 1% in both value and volume terms in the year to June 2008, reflecting growth in product categories such as toothpaste, mouthwash, deodorants and liquid soap.
(Source of market data: McBride estimates based on Taylor Nelson Sofres retail selling price data)
Key business developments
Coming into the year, our priorities were to continue driving Private Label growth in our product categories, to extract sustainable synergies from prior year acquisitions, to continue delivering premium growth in Personal Care and to expand our distribution channels. However, the input cost inflation during the year presented a significant challenge to the business, with our key priority becoming the delivery of a range of actions to protect margins in this difficult environment.
These actions included increasing selling prices, in line with much of the industry, as well as a heightened focus on offsetting cost pressures through value engineering and efficiency improvements. Successful initiatives in these areas included diversifying the range and sources of raw materials and 'lightweighting' of packaging, including the plastic containers used for our products. Our capital investment also focused on cost reduction activities.
The process of increasing selling prices disrupted the business, particularly due to a material reduction in promotional activity. This was evident in lower sales volumes through the middle part of the financial year although volumes recovered towards the end of the year as Private Label products recovered lost market share. Our strategic focus on Personal Care continues to be vindicated with organic revenue growth of 4%, well ahead of the overall Private Label market, with notable strength in men's grooming and skin care.
We completed significant work in integrating the prior year acquisitions of Henkel's UK Private Label Household products business and Darcy Industries. Overall, the acquired businesses traded in line with plan. We also closed the Bolton factory that formed part of the Darcy Industries acquisition. Our new St Helens site will be an important part of our asset portfolio going forwards providing much needed capacity and capability, increased scope for rationalising production and further opportunity to achieve productivity and service improvements.
Financial review
Revenue grew by 7% to £297.3 million (2007: £277.1m). With £42.0 million (2007: £10.5m) of revenue attributable to prior year acquisitions, organic revenue declined 4%, reflecting lower volumes in Household, with Personal Care having another successful year, with organic revenue growth of 4%.
Operating profit, before amortisation of intangible assets and exceptional items, declined to £15.2 million (2007: £24.5m) reflecting reduced Household volumes, the time lag between cost increases and raising prices and costs associated with increased investment in plant and product innovation.
Our capital investment in the year was focused on building incremental capacity in areas with good growth opportunities, such as Personal Care, on improving efficiencies and reducing unit costs and supporting innovation and new product development. Major projects in the year included additions to internal bottle blowing capabilities in Burnley and our Personal Care facility in Bradford and additions to production and filling lines for automatic dishwashing tablets, air care, bleach and aerosols. We invested a total of £12.4 million in the year (2007: £9.1m).
Western Continental Europe business review
Markets
In the last year, the Household and Personal Care markets in Western Continental Europe have been increasingly affected by the growing macroeconomic uncertainties. Market growth rates have moderated to varying degrees in the countries in which McBride has a significant presence.
France is McBride's largest market in Western Continental Europe and the Group is active in both its Household and Personal Care markets. In Household products, the market has gone from a growth rate of 2% last year to a decline of 3% in the year to July 2008. Over the same period, Private Label has maintained an annual growth rate of 3-4%, gaining significant market share as consumers increasingly take advantage of the value and quality offered by Private Label. Growth in Private Label was driven by automatic dishwashing products, washing up liquid, specialist cleaners and air care.
The French Personal Care market also declined in the year to July 2008, by 1% in value terms, following the same level of decline in the prior year. At the same time, the French Private Label Personal Care market grew by 1%, with growth concentrated in shower gel, soap and deodorant products.
In Italy, McBride's second largest market in Western Continental Europe, where the Group operates predominantly in the Household market, the overall Household market continued its recent trend of growing at 3-4% per annum in value terms. Private Label has continued the pattern of accelerating outperformance relative to the overall market reported at the half year with annual growth in value terms of 8% seen in the year to June 2008. Overall market growth was supported by strength in washing up liquid and automatic dishwashing products which were also features of Private Label growth but with Private Label outperformance driven by very rapid growth in laundry liquids.
(Source of market data: IRI and Secodip)
Key business developments
The business performed satisfactorily in the face of very challenging market conditions. In particular, our prior year acquisitions contributed strongly in revenue and profit terms in line with expectations set at the time of acquisition.
Whilst the extent of cost increases meant it was inevitable that price increases were required, we had significant success in minimising these through active management in procurement as well as value engineering. We also achieved further operational efficiencies, for example reducing headcount through investment in automation.
The acquisitions of Chemolux (Henkel's Continental European Private Label Household products business) and Dasty Italia bring significant opportunity in our targeted growth product categories and, particularly with Dasty, a geographic market with strong Private Label growth. At Dasty, we have achieved significant cost synergies, particularly in procurement, but also from production transfers between our existing Italian site and Dasty's sites. Meanwhile, at Chemolux significant work was completed to transfer production of non-automatic dishwashing products from outside the Group to various McBride production sites.
In the underlying business, sales performance strengthened as the year progressed with improvement seen across both Household and Personal Care sectors.
In the Household products business, there was good sales growth in automatic dishwashing products offset by ongoing declines in laundry powder. Belgium and The Netherlands delivered good growth with success in increasing penetration of key retail accounts and retailers placing greater emphasis on Private Label sales. Complementing the success at Dasty, our existing Italian business performed satisfactorily. The only significant area of sales underperformance was in our Household products business in France. This was attributable to exiting contracts with unacceptable profitability together with strong competitive pressures.
Our increasing focus on Personal Care delivered strong organic growth once more with a particularly good performance in the hair care category. Progress in establishing growth in higher value sectors, such as premium hair care and shower gels, was also a feature of the second half.
Financial review
Total Western Continental Europe revenue was up 30% to £395.4 million (2007: £304.2m) reflecting the effect of acquisitions (22%) and positive currency exchange rate movements (8%). The underlying business delivered a resilient performance with an excellent performance in Personal Care, which delivered 8% organic revenue growth, offsetting a reduction in organic revenue in Household. Aggregate revenue from the prior year acquisitions was ahead of plan.
Operating profit, before amortisation of intangible assets and exceptional items, was up 10% to £11.4 million (2007: £10.4m). The increased profits reflect the contribution from the acquisitions of Dasty Italia and Chemolux with profits in the underlying business declining due to higher input costs.
Capital expenditure increased significantly in the year to £13.0 million (2007: £9.2m) reflecting investment at recent acquisitions as well as the translation effect of the Euro strengthening against Sterling. Nevertheless, capital investment was higher in the underlying business with major projects at our two sites in Ieper with the Personal Care facility completing a further increase in bottle blowing capability whilst the Household products facility introduced additional automation to reduce costs.
Eastern Continental Europe business review
Markets
The Household and Personal Care markets of Eastern Continental Europe continue to be very dynamic, reflecting increasing consumer affluence and aspiration, with growing consumption of Household and Personal Care products and intense focus from manufacturers. In McBride's current core markets in the region of Poland, Hungary, Czech Republic and Slovakia, the combined Household and Personal Care markets increased in value terms by 4% and 5% respectively in 2007. In other markets further east and south, growth rates are significantly higher, for example Romania, 12% and 10%; and Ukraine, 13% and 16%, in both cases in Household and Personal Care respectively.
Private Label market shares in the region are also consistently increasing but they remain at low levels compared to Western Europe, typically no more than 5%, providing ample scope for future growth. This positive outlook should be supported by retail growth and consolidation led by discounters and international retail chains that are experienced in the use of Private Label in their overall retail offer.
(Source of market data: Euromonitor)
Key business developments
The Eastern Continental Europe business had a good year, achieving overall revenue growth of 28%, reflecting increases in both Household and Personal Care. Operating profit increased ahead of revenue growth reflecting the substantial investment made in the business in recent years.
The key performance driver in the year was our success in capitalising on the expansion of major retail customers to drive Private Label sales through a combination of strong new product development and innovation, competitive pricing and significantly improved customer service and product availability. In particular, outstanding growth was achieved in Hungary and the Czech Republic.
In Household products, the best performing product categories were fabric conditioners and bleach, reflecting recent investment in new product development whilst in Personal Care, strong growth was seen in our bath and shower ranges.
Whilst driving the commercial aspects of the business, we also delivered enhancements in operational performance with a significant reduction in our waste levels. This reflects further investment in the management team and additional control and visibility provided by the SAP system installed in 2007.
The business continued to invest in its management resources to support its growth ambitions. During the year, new senior personnel in logistics and supply chain and human resources were appointed, supplementing the significant resources that were added in the prior year.
Financial review
Reported Eastern Continental Europe revenue increased 28% to £32.1 million (2007: £25.0m) with organic growth of 8% or 16% in our core retail sales activities. The remaining revenue growth was attributable primarily to significant strengthening of the Polish Zloty against Sterling and the full year effect of the Schneider acquisition completed in the prior year. Revenue increased at similar rates in both Household and Personal Care products with Household's share of total divisional revenue remaining at 64% (2007: 64%).
Operating profit, before amortisation of intangible assets and exceptional items, was £2.1 million (2007: £1.5m). Operating profit growth reflected not only increased revenues but also improved discipline in pricing of new business and leveraging the overhead resources invested in the business in the previous year.
Capital expenditure declined to £0.8 million (2007: £1.7m) following significant investment in the prior year in new systems, bottle blowing machines and mixing and filling facilities.
Group financial review
Revenue
Group revenue increased 18% to £700.9 million (2007: £592.0m). This increase reflects a 15% incremental contribution from prior year acquisitions and a 5% translation benefit from the strengthening of the Euro and Polish Zloty against Sterling, partially offset by a 2% decline in organic revenues (at constant exchange rates). The decline in organic revenue reflects a 4% reduction in Household sales partially offset by a 5% increase in Personal Care, with growing demand across all three business divisions.
By geographic origin, UK revenues grew 7% to £297.3 million (2007: £277.1m) with an 11% incremental contribution from acquisitions and a 4% organic reduction. Revenues in Western Continental Europe increased 30% to £395.4 million (2007: £304.2m) reflecting a 22% contribution from acquisitions, flat organic sales and an 8% currency translation benefit. Eastern Continental Europe's revenues improved 28% to £32.1 million (2007: £25.0m) comprising a 4% incremental contribution from acquisitions, an 8% increase in organic sales and a 16% currency translation benefit.
Operating profit
Group operating profit, before amortisation of intangible assets and exceptional items, declined 22% to £27.0 million (2007: £34.5m). The operating margin declined from 5.8% to 3.9% with the main drivers being a significant increase in raw materials, fuel and other input costs, and higher administration costs mainly due to acquisitions, partially offset by selling price increases, operational efficiencies and purchasing savings. Group reported operating profit declined 33% to £21.4 million (2007: £31.9m), the higher rate of decline relative to adjusted operating profit reflecting the higher level of amortisation of intangible assets and exceptional items in the current year.
Net finance costs
Reported net finance costs increased to £5.7 million (2007: £2.4m), reflecting an increased interest expense arising from a higher average debt level following the acquisitions in late 2007, and also higher interest rates.
Exceptional items
There was a £4.0 million pre-tax operating exceptional charge to the income statement in the year (2007: £2.1m). £3.1 million of this related to redundancy programmes in the UK and Western Continental Europe divisions and £0.9 million to the costs of an aborted acquisition.
Profit before tax and tax charge
Profit before tax reduced to £15.7 million (2007: £29.5m) and, excluding amortisation of intangible assets and exceptional items, was £21.3 million (2007: £32.1m). The £4.2 million taxation charge (2007: £8.2m) represents a 27% effective rate, compared to 28% in 2007 and 29% in 2006.
Earnings per share and dividend
Basic earnings per share (EPS) declined 46% to 6.4 pence (2007: 11.9p). Adjusted basic EPS (before amortisation of intangible assets and exceptional items) decreased 33% to 8.7 pence (2007: 13.0p). On an adjusted basis, diluted EPS declined 32% to 8.6 pence (2007: 12.7p). The weighted average issued and diluted number of shares in the year used in calculating these EPS figures were 180.1 million and 181.6 million respectively (2007: 177.4m and 181.2m).
A final dividend of 3.9 pence per share is recommended, giving a full year dividend of 5.6 pence per share, the same level as the prior year. The final dividend, if approved by shareholders at the AGM on 27 October 2008, will be paid on 28 November 2008 to shareholders on the register on 24 October 2008. The ex-dividend date will be 22 October 2008. The £10.1 million total dividend relating to the year is covered 1.5 times (2007: 2.3 times) by post-tax profit before amortisation of intangible assets and exceptional items.
Cash flow
The Group maintained its strong cash-generative characteristics despite the reduction in operating profit, with net cash generated from operations, before exceptional items, of £49.4 million (2007: £49.5m). This included a £0.5 million net working capital inflow (2007: £2.3m outflow).
Capital expenditure increased 33% in the year to £26.5 million (2007: £20.0m) with the main increases in investment focused on cost saving, new product development and essential replacement. There were no businesses acquired in the year (2007: £57.8m).
Net interest payments increased to £7.3 million (2007: £3.2m) reflecting primarily the higher average debt levels following the acquisitions completed late in 2007.
There were total payments in the year of £11.4 million (2007: £1.2m receipts) related to the settlement of Euro currency net investment hedging contracts, with the substantial increase relative to the prior year due to the significant strengthening of the Euro against Sterling.
There was a cash outflow of £4.6 million (2007: £1.7m) relating to exceptional items, primarily related to redundancy programmes in the UK and Western Continental Europe divisions.
Ordinary dividend payments were higher at £10.1 million (2007: £9.2m) reflecting the increase in the final dividend for 2007 paid in 2008 over the final dividend for 2006 paid in 2007.
Net debt increased by £22.4 million to £103.3 million (2007: £80.9m), with £19.5 million of this increase due to exchange rate movements, primarily the strengthening of the Euro against Sterling on translation of Euro-denominated debt and settlement of Euro currency net investment hedging contracts.
Balance sheet
Group net assets at the year end reduced by £1.4 million to £118.9 million (2007: £120.3m). Increases in net debt, fixed assets and working capital were all mainly due to exchange rate movements. The Euro strengthened against Sterling from 1.49 at 30 June 2007 to 1.26 at 30 June 2008.
Liabilities for pensions and other post-employment benefits increased by £1.0 million from last year to £7.8 million, net of associated deferred tax asset (2007: £6.8m). The majority of this liability, £5.7 million (2007: £5.1m), relates to the UK defined benefit pension scheme.
The pre-tax, before amortisation of intangible assets and exceptional items, return on average capital employed reduced from 22.1% to 12.8%. This reduction reflects lower returns on capital in the organic business, with the returns on the 2007 acquisitions remaining stable.
Consolidated income statement
for the year ended 30 June 2008
| Pre exceptional items | Exceptional items (note 4) | Post exceptional items | Pre exceptional items | Exceptional items (note 4) | Post exceptional items | ||
| 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | ||
| Note | £m | £m | £m | £m | £m | £m | |
| Revenue | 3 | 700.9 | - | 700.9 | 592.0 | - | 592.0 |
| Cost of sales | (470.9) | - | (470.9) | (393.0) | - | (393.0) | |
| Gross profit | 230.0 | - | 230.0 | 199.0 | - | 199.0 | |
| Distribution costs | (47.2) | - | (47.2) | (39.7) | - | (39.7) | |
| Administrative costs | |||||||
| Before amortisation of intangible assets | (155.8) | (4.0) | (159.8) | (124.8) | (2.1) | (126.9) | |
| Amortisation of intangible assets | (1.6) | - | (1.6) | (0.5) | - | (0.5) | |
| Administrative costs including amortisation of intangible assets | (157.4) | (4.0) | (161.4) | (125.3) | (2.1) | (127.4) | |
| Operating profit | 3,4 | 25.4 | (4.0) | 21.4 | 34.0 | (2.1) | 31.9 |
| Financial income | 6.0 | - | 6.0 | 4.8 | - | 4.8 | |
| Financial expenses | (11.7) | - | (11.7) | (7.2) | - | (7.2) | |
| Net financing costs | (5.7) | - | (5.7) | (2.4) | - | (2.4) | |
| Profit before tax | 19.7 | (4.0) | 15.7 | 31.6 | (2.1) | 29.5 | |
| Taxation | 7 | (5.3) | 1.1 | (4.2) | (8.8) | 0.6 | (8.2) |
| Profit for the year | 14.4 | (2.9) | 11.5 | 22.8 | (1.5) | 21.3 | |
| Attributable to: | |||||||
| Equity holders of the parent | 14.4 | (2.9) | 11.5 | 22.7 | (1.5) | 21.2 | |
| Minority interest | - | - | - | 0.1 | - | 0.1 | |
| Profit for the year | 14.4 | (2.9) | 11.5 | 22.8 | (1.5) | 21.3 | |
| All activities relate to continuing operations | |||||||
| Earnings per ordinary share (pence) | 6 | ||||||
| Basic | 6.4 | 11.9 | |||||
| Diluted | 6.3 | 11.7 | |||||
| Dividends | |||||||
| Paid in year (£m) | 10.1 | 9.2 | |||||
| Paid in year (pence per share) | 5.6 | 5.2 | |||||
| Proposed (£m) | 7.0 | 6.9 | |||||
| Proposed (pence per share) | 3.9 | 3.9 | |||||
Consolidated balance sheet
at 30 June 2008
| 2008 | 2007 | ||||
| Note | £m | £m | |||
| Non-current assets | |||||
| Intangible assets | 42.1 | 41.7 | |||
| Property, plant and equipment | 187.3 | 164.3 | |||
| Other non-current assets | 0.5 | 0.5 | |||
| Deferred tax | - | 2.6 | |||
| 229.9 | 209.1 | ||||
| Current assets | |||||
| Inventories | 66.0 | 59.6 | |||
| Trade and other receivables | 135.3 | 130.6 | |||
| Cash and cash equivalents | 4.4 | 6.6 | |||
| Assets classified as held for sale | 0.9 | 0.9 | |||
| 206.6 | 197.7 | ||||
| Total assets | 3 | 436.5 | 406.8 | ||
| Current liabilities | |||||
| Interest bearing loans and borrowings | 24.5 | 9.9 | |||
| Trade and other payables | 183.3 | 173.1 | |||
| Current tax payable | - | 1.9 | |||
| Provisions | 2.0 | 2.0 | |||
| 209.8 | 186.9 | ||||
| Non-current liabilities | |||||
| Interest bearing loans and borrowings | 83.2 | 77.6 | |||
| Pensions and other post-employment benefits | 10.0 | 8.9 | |||
| Provisions | - | 1.6 | |||
| Deferred tax | 14.6 | 11.5 | |||
| 107.8 | 99.6 | ||||
| Total liabilities | 3 | 317.6 | 286.5 | ||
| Net assets | 118.9 | 120.3 | |||
| Equity | |||||
| Issued share capital | 18.0 | 17.8 | |||
| Share premium account | 143.0 | 141.8 | |||
| Other reserves | 0.3 | (0.2) | |||
| Retained earnings | (42.4) | (39.1) | |||
| Total equity and reserves | 118.9 | 120.3 |
M W Roberts
I R Johnson
Directors
Consolidated cash flow statement
for the year ended 30 June 2008
| 2008 | 2007 | ||||
| Note | £m | £m | |||
| Profit before tax | 15.7 | 29.5 | |||
| Net financing costs | 5.7 | 2.4 | |||
| Pre-tax exceptional charge in the year | 4.0 | 2.1 | |||
| Share based payments | - | 0.2 | |||
| Loss/(profit) on sale of property, plant and equipment | 0.1 | (0.1) | |||
| Depreciation | 21.8 | 17.2 | |||
| Amortisation of intangible assets | 1.6 | 0.5 | |||
| Operating cash flow before changes in working capital | 48.9 | 51.8 | |||
| Decrease/(increase) in receivables | 8.7 | (3.8) | |||
| Increase in inventories | - | (7.1) | |||
| (Decrease)/increase in payables | (8.2) | 8.6 | |||
| Cash flow in respect of exceptional items | (4.6) | (1.7) | |||
| Cash generated from operations | 44.8 | 47.8 | |||
| Interest paid | (7.5) | (3.3) | |||
| Taxation paid | (3.8) | (6.3) | |||
| Net cash from operating activities | 33.5 | 38.2 | |||
| Cash flows from investing activities | |||||
| Proceeds from sale of land and buildings | 0.1 | 0.1 | |||
| Acquisition of property, plant and equipment | (26.4) | (19.8) | |||
| Acquisition of intangible assets | (0.1) | (0.2) | |||
| Acquisition of businesses, net of cash acquired | 5 | - | (57.8) | ||
| Acquisition of minority interest |
| - | (1.7) | ||
| Interest received | 0.2 | 0.1 | |||
| Forward contracts used in net investment hedging | (11.4) | 1.2 | |||
| Net cash used in investing activities | (37.6) | (78.1) | |||
| Cash flows from financing activities | |||||
| Proceeds from issue of share capital | 1.5 | 0.7 | |||
| Repurchase of own shares | (1.4) | - | |||
| Increase in borrowings | 32.5 | 53.7 | |||
| Repayment of borrowings | (20.2) | (4.4) | |||
| Payment of finance lease liabilities | (0.9) | (0.7) | |||
| Dividends paid | (10.1) | (9.2) | |||
| Net cash generated from financing activities | 1.4 | 40.1 | |||
| Net (decrease)/increase in cash and cash equivalents | (2.7) | 0.2 | |||
| Cash and cash equivalents at start of year | (1.0) | (1.3) | |||
| Effect of exchange rate fluctuations on cash held | 0.3 | 0.1 | |||
| Cash and cash equivalents at end of year | (3.4) | (1.0) | |||
| Reconciliation of cash and cash equivalents per the balance sheet and cash flow statement | |||||
| Cash and cash equivalents per the balance sheet | 4.4 | 6.6 | |||
| Overdrafts | (7.8) | (7.6) | |||
| Cash and cash equivalents per the cash flow statement | (3.4) | (1.0) | |||
Reconciliation of net cash flow to movement in net debt
for the year ended 30 June 2008
| 2008 | 2007 | |||||
| £m | £m | |||||
| (Decrease)/increase in cash and cash equivalents in the year | (2.7) | 0.2 | ||||
| Cash inflow from movement in debt | (12.3) | (49.3) | ||||
| Movement on finance leases | 0.9 | 0.7 | ||||
| Change in net debt resulting from cash flows | (14.1) | (48.4) | ||||
| Lease financing acquired with subsidiary | - | (1.2) | ||||
| Loans acquired with subsidiaries | - | (2.9) | ||||
| Finance lease additions | (0.2) | - | ||||
| Translation differences | (8.1) | 0.7 | ||||
| Movement in net debt in the year | (22.4) | (51.8) | ||||
| Net debt at the beginning of the year | (80.9) | (29.1) | ||||
| Net debt at the end of the year | (103.3) | (80.9) | ||||
| Consolidated statement of recognised income and expense | ||||||
| for the year ended 30 June 2008 | ||||||
| 2008 | 2007 | |||||
| £m | £m | |||||
| Foreign exchange translation differences | 19.8 | (1.1) | ||||
| Net (loss)/gain on hedge of net investment in foreign subsidiaries | (18.9) | 0.8 | ||||
| Effective portion of changes in fair value cash flow hedges | (0.6) | (0.2) | ||||
| Net changes in fair value of cash flow hedges transferred to profit or loss | 0.2 | (0.1) | ||||
| Tax on items taken directly to equity | 0.6 | (1.4) | ||||
| Actuarial (loss)/gain | (2.0) | 4.6 | ||||
| Income and expense recognised directly in equity | (0.9) | 2.6 | ||||
| Profit for the year | 11.5 | 21.3 | ||||
| Total recognised income and expense for the year | 10.6 | 23.9 | ||||
| Attributable to: | ||||||
| Equity shareholders of the parent | 10.6 | 23.8 | ||||
| Minority interest | - | 0.1 | ||||
| 10.6 | 23.9 | |||||
NOTES TO THE FINANCIAL STATEMENTS
| 1) Exchange rates | ||||
| The exchange rates against Sterling used for the periods were as follows: | ||||
| 2008 | 2007 | 2008 | 2007 | |
| Average rate | Closing rate | |||
| Euro | 1.37 | 1.48 | 1.26 | 1.49 |
| Polish Zloty | 4.95 | 5.74 | 4.23 | 5.59 |
| Czech Koruna | 36.1 | 41.8 | 30.2 | 42.7 |
| Hungarian Forint | 346.8 | 384.2 | 297.0 | 365.0 |
2) Basis of preparation
This financial information has been prepared in accordance with IFRS adopted for use in the EU ("adopted IFRS") in accordance with EU law (IAS Regulation EC 1606/2002). This financial information has been prepared on the basis of recognition and measurement requirements of adopted IFRSs as at 30 June 2008.
3) Segment information
Segment information is presented below in respect of the Group's geographic and business segments. The primary format, geographic segments, is based on the Group's operating divisions and internal reporting structure. Transfer prices between segments are set on an arms length basis. Segment revenue and profit include transfers between segments which are eliminated in consolidation.
| Geographic segments | United Kingdom | Western Continental Europe | Eastern Continental Europe | Elimination | Total | |||||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| External revenue | 292.5 | 274.5 | 377.2 | 292.8 | 31.2 | 24.7 | - | - | 700.9 | 592.0 |
| Inter segment revenue | 4.8 | 2.6 | 18.2 | 11.4 | 0.9 | 0.3 | (23.9) | (14.3) | - | - |
| Total segment revenue | 297.3 | 277.1 | 395.4 | 304.2 | 32.1 | 25.0 | (23.9) | (14.3) | 700.9 | 592.0 |
| Segment profit before amortisation of intangible assets | 15.2 | 24.5 | 11.4 | 10.4 | 2.1 | 1.5 | (0.1) | (0.1) | 28.6 | 36.3 |
| Amortisation of intangible assets | (0.5) | (0.2) | (1.0) | (0.2) | (0.1) | (0.1) | - | - | (1.6) | (0.5) |
| Segment profit | 14.7 | 24.3 | 10.4 | 10.2 | 2.0 | 1.4 | (0.1) | (0.1) | 27.0 | 35.8 |
| Corporate costs* | (1.6) | (1.8) | ||||||||
| Exceptional items (see note 4) | (4.0) | (2.1) | ||||||||
| Operating profit | 21.4 | 31.9 | ||||||||
| Net finance costs | (5.7) | (2.4) | ||||||||
| Taxation | (4.2) | (8.2) | ||||||||
| Profit for the year | 11.5 | 21.3 | ||||||||
*Corporate costs relate primarily to head office costs that are not allocated to one of the geographic segments
| United Kingdom | Western Continental Europe | Eastern Continental Europe | Corporate* | Total | ||||||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| Segment assets | 165.4 | 155.4 | 247.0 | 231.9 | 22.3 | 15.8 | 1.8 | 3.7 | 436.5 | 406.8 |
| Segment liabilities | (92.1) | (74.8) | (120.8) | (110.9) | (6.7) | (5.0) | (98.0) | (95.8) | (317.6) | (286.5) |
| Capital expenditure* | 12.4 | 9.1 | 13.0 | 9.2 | 0.8 | 1.7 | 0.3 | - | 26.5 | 20.0 |
| Amortisation and depreciation | 8.7 | 7.7 | 14.1 | 9.5 | 0.6 | 0.5 | - | - | 23.4 | 17.7 |
*Corporate liabilities include external debt and tax liabilities. Capital expenditure includes property, plant and equipment and intangible assets
| Business segments | Household | Personal Care | Total | |||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| £m | £m | £m | £m | £m | £m | |
| Segment revenue | 575.0 | 476.9 | 125.9 | 115.1 | 700.9 | 592.0 |
| Segment profit before amortisation of intangible assets | 21.9 | 26.9 | 6.7 | 9.4 | 28.6 | 36.3 |
| Amortisation of intangible assets | (1.5) | (0.4) | (0.1) | (0.1) | (1.6) | (0.5) |
| Segment profit | 20.4 | 26.5 | 6.6 | 9.3 | 27.0 | 35.8 |
| Corporate costs* | (1.6) | (1.8) | ||||
| Exceptional items (see note 4) | (4.0) | (2.1) | ||||
| Operating profit | 21.4 | 31.9 | ||||
| *Corporate costs relate primarily to head office costs that are not allocated to one of the business segments | ||||||
| Household | Personal Care | Corporate | Total | ||||||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||
| £m | £m | £m | £m | £m | £m | £m | £m | ||
| Segment assets | 346.2 | 327.2 | 88.5 | 75.9 | 1.8 | 3.7 | 436.5 | 406.8 | |
| Capital expenditure* | 16.4 | 12.9 | 9.8 | 7.1 | 0.3 | - | 26.5 | 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 by destination.
| United Kingdom | Western Continental Europe | Eastern Continental Europe and Rest of World | Total | |||||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
| External revenue by destination | 279.3 | 261.0 | 362.1 | 282.6 | 59.5 | 48.4 | 700.9 | 592.0 |
4) Exceptional items
The Group presents certain items as 'exceptional'. These are items which, in management's judgement, need to be disclosed by virtue of their size or incidence in order to obtain a proper understanding of the financial information.
There was a £3.1 million pre-tax operating exceptional charge to the income statement in the year relating to redundancy programmes in the UK and Western Continental Europe divisions. There was also a £0.9 million pre-tax operating exceptional charge to the income statement relating to the costs of an aborted acquisition. This included third party advisor and consultant costs.
The £2.1 million 2007 pre-tax operating exceptional charge included the incremental costs of integrating recently acquired businesses. This included disruption costs, asset write offs and consultant costs.
In terms of segment analysis in note 3, the exceptional charge relates to the UK £2.0 million (2007: £0.8m), Western Continental Europe £1.3 million (2007: £0.8m) and Corporate £0.7 million (2007: £0.5m), on a geographic basis, and Household £2.9 million (2007: £1.6m), Personal Care £0.4 million (2007: £nil) and Corporate £0.7 million (2007: £0.5m) on a business basis.
5) Acquisitions
On 13 April 2007 and 27 April 2007, the Group acquired all of the shares of Chemolux S.a.r.l., and the business and assets of Darcy Industries Limited respectively. Due to the proximity of these acquisitions to the 30 June 2007 year end, the fair values of their identifiable assets and liabilities were prepared on a provisional basis in the prior year. These fair values have been finalised in the current year in accordance with IFRS 3 Business Combinations which allows fair values to be finalised within twelve months of acquisition. For Chemolux the finalisation of these fair values resulted in an increase in inventory provisions of £0.1 million, a decrease in trade and other receivables of £0.1 million and a decrease in trade and other payables of £0.1 million resulting in a net increase in goodwill of £0.1 million. For Darcy the finalisation of these fair values resulted in a decrease in fixed assets of £0.4 million and an increase in trade and other payables of £0.1 million, resulting in a net increase in goodwill of £0.5 million. There were no other fair value adjustments in respect of other acquisitions. These adjustments to provisional fair values have been recognised by adjusting comparative information for the prior year.
We have an outstanding query in respect of one acquisition that may be the subject of a formal claim by us in due course. It is not currently possible to determine either the amount or timing of any potential receipt in settlement of this query and therefore no adjustment has been made to fair value.
6) Earnings per share
Basic earnings per ordinary share is calculated on profit after tax and minority interest, attributable to equity holders of the parent, divided by the weighted average number of ordinary shares in issue during the year in accordance with IAS 33.
| 2008 | 2007 | ||
| Total earnings (£m) | a | 11.5 | 21.2 |
| Weighted average number of ordinary shares | b | 180,121,808 | 177,405,917 |
| Basic earnings per share (pence) | a/b | 6.4 | 11.9 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on assumption of conversion of all potentially dilutive ordinary shares.
During the year, the Company had three categories of potentially dilutive ordinary shares: share options issued whose exercise price is less than the average price of the Company's ordinary shares during the year, share awards with no option price and shares allocated to an approved Save As You Earn scheme.
| 2008 | 2007 | ||
| Weighted average number of ordinary shares (million) | b | 180.1 | 177.4 |
| Effect of dilutive share options (million) | 0.3 | 0.3 | |
| Effect of dilutive share awards (million) | 1.1 | 0.8 | |
| Effect of dilutive SAYE scheme shares (million) | 0.1 | 2.7 | |
| c | 181.6 | 181.2 | |
| Diluted earnings per share (pence) | a/c | 6.3 | 11.7 |
Adjusted basic earnings per share applies to earnings excluding exceptional items and amortisation of intangible assets since the directors consider that this gives additional information as to the underlying performance of the Group.
| 2008 | 2007 | ||
| £m | £m | ||
| Earnings used to calculate basic and diluted EPS | a | 11.5 | 21.2 |
| Exceptional items after tax | 2.9 | 1.5 | |
| Amortisation of intangible assets after tax | 1.2 | 0.4 | |
| Earnings before exceptional items and amortisation of intangible assets | d | 15.6 | 23.1 |
| Adjusted basic earnings per share (pence) | d/b | 8.7 | 13.0 |
| Adjusted diluted earnings per share (pence) | d/c | 8.6 | 12.7 |
7) Taxation
The £4.2 million tax charge for the year ended 30 June 2008 (2007: £8.2m) consists of £1.6 million (2007: £5.4m) of UK tax and £2.6 million (2007: £2.8m) of overseas tax.
8) Subsequent events
On 4 August 2008, the Group announced its intention to close its Coventry factory and to scale down its activities in Warrington with production to be transferred to a new facility in St Helens. Formal consultations have commenced with employee representatives. On 3 September, an announcement was made on further restructuring in the UK.
9) Other notes
The financial information set out above does not constitute the company's statutory accounts for the years ended 30 June 2008 or 2007. Statutory accounts for 2007, which were prepared under IFRS, as adopted by the EU, have been delivered to the Registrar of Companies. The auditors have reported on those accounts. The annual financial information presented in this the preliminary announcement for the year ended 30 June 2008 is based on, and is consistent with, that in the Group's audited financial statements for the year ended 30 June 2008, and the financial statements will be sent to shareholders in due course. The auditors report on the financial statements is unqualified and does not contain any statement under section 237(2) or (3) of the Companies Act 1985.
The Annual Report for 2008 will be issued to shareholders on 25 September 2008 and will be available from the company secretary at the Company's Registered Office, 28th Floor, Centre Point, 103 New Oxford Street, London, WC1A 1DD and from the Group's website at www.mcbride.co.uk; the Annual General Meeting will be held on Monday 27 October 2008.
If approved at the Annual General Meeting on 27 October 2008, a final dividend of 3.9 pence per share will be paid on 28 November 2008 to shareholders on the register at 24 October 2008. The ex-dividend date will be 22 October 2008.