Pz Cussons Regulatory News (PZC)

29 Jan 2008 07:01

PZ CUSSONS PLC29 January 2008 29th January 2008 PZ CUSSONS PLC INTERIM ANNOUNCEMENT OF RESULTS FOR THE HALF YEAR TO 30TH NOVEMBER 2007 PZ Cussons Plc, a leading consumer products group in personal care and householdproducts, announces its interim results for the six months ended 30th November2007. Results (before exceptional items1) Half-year to Half-year to % change 30/11/07 30/11/06Revenue £299.5m £279.8m + 7%Operating profit £32.0m £29.0m + 10%Profit before taxation £32.5m £30.2m + 8%Adjusted basic earnings per share 4.69p 4.17p + 13% Statutory resultsOperating profit £34.9m £29.0m + 20%Profit before taxation £35.4m £30.2m + 17%Basic earnings per share 5.33p 4.17p + 28%Interim dividend per share 1.075p 1.000p + 7.5%Net funds2 £40.2m £35.2m 1 Exceptional items are detailed in note 4. 2 Net funds, above and hereafter, are defined as cash, short-term deposits,current asset investments less borrowings. Highlights • Announcement today of the acquisition of The Sanctuary Brand and Spa for a consideration of £75m in cash (see separate announcement) • Good trading performance in all three regions of Africa, Asia and Europe • Margin improvement initiatives continuing to counter impact of weak US dollar • No.1 position in UK Personal Wash category maintained through further new product launches • Construction of new UK Personal Wash facility on schedule with production commencing in spring 2008 • Strong growth achieved in Nigeria, particularly in electrical and nutrition categories • Additional nutrition manufacturing capacity in Nigeria now on stream • £18m investment programme in Nigerian factories announced during period • Group net funds position at 30th November remains strong at £40.2m • Interim dividend increased by 7.5% to 1.075p per share from 1.000p per share Commenting today, Anthony Green (Chairman) said: "We have had a successful first half of the financial year, with improvements inboth revenue and profitability versus the same period last year. Our two largestmarkets, the UK and Nigeria, continue to deliver good growth supported byinvestment in both brand portfolios and manufacturing capability. The Group's balance sheet remains strong with cash generated from operatingactivities and property disposals currently funding our ongoing capitalinvestment plan. The strong balance sheet has today enabled us to complete theacquisition of The Sanctuary Brand and Spa. This is an excellent strategic fitwhich bolsters our developed market presence and further strengthens our UKposition as leader in the Personal Wash category. Following this acquisition our balance sheet continues to be strong, givingflexibility for further investment opportunities as well as a continued growthin the Group's dividend. Overall performance since the half-year end has been in line with managementexpectations." Press Enquiries PZ Cussons Graham Calder (Deputy Chairman) Brandon Leigh (Finance Director)Hogarth John Olsen, Sarah MacLeod, Sarah Richardson On 29th and 30th January c/o Hogarth on 020 7357 9477. After 30th January to Graham Calder or Brandon Leigh on 0161 491 8000. An analysts' presentation will be held on 29th January 2008 at 9.30am at theoffices of JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. Overview PZ Cussons is pleased to report that profit before tax and exceptional itemsrose 8% to £32.5 million (H1 2006: £30.2 million) on revenue up 7% to £299.5million (H1 2006: £279.8 million). After exceptional items reported profitbefore tax increased by 17% to £35.4 million (H1 2006: £30.2 million). Basicearnings per share were 5.33p (H1 2006: 4.17p). Adjusted for exceptional items,adjusted basic earnings per share rose 13% to 4.69p (H1 2006: 4.17p). As at 30th November 2007 the Group had net funds of £40.2 million (H1 2006:£35.2 million). The board is recommending a dividend increase of 7.5% for the period with aninterim dividend of 1.075p per share (H1 2006: 1.000p) to be paid on 7th April2008 to shareholders on the register at the close of business on 29th February2008. Major projects Updates on major projects are as follows: In the UK, construction of the Group's 'Personal Wash Centre of Excellence' inManchester is on schedule with production expected to commence during the springof 2008 followed by completion of the Research and Development and FragranceDevelopment Centres by the end of 2008. As previously announced, the total costof £26 million will largely be funded by the proceeds from the sale of the UKfactory sites in Nottingham, Ellesmere Port and Manchester. The sale of theManchester site was completed during the period generating proceeds of £4.6million and giving rise to an exceptional gain of £2.9 million. The sale ofsites at Nottingham and Ellesmere Port are expected to be concluded by the endof 2008. In Nigeria, expansion of the manufacturing facilities of the nutrition jointventure is also on schedule. Expansion of the current factory was completed justafter the period end providing additional capacity for the production ofpowdered and evaporated milk. As previously announced, the scope and design of asecond factory has now been finalised and construction will commence shortlywith completion expected by the end of 2008. The Group's share of the total costof both projects will be approximately £10 million in aggregate. In addition, the Group concluded the first part of a major two stage review ofits Nigerian manufacturing facilities, resulting in the approval of an £18million investment programme. This programme will relocate and modernise theproduction facilities for the health and beauty business and also provideadditional logistical and distribution facilities to meet the growing demands ofthe electrical goods business. Trading performance - overview Operating profit before exceptional items rose by 10% to £32.0 million (H1 2006:£29.0 million) on revenue up 7% to £299.5 million (H1 2006: £279.8 million).Profitability has improved in all three regions versus the same period last yearas follows: Regional reviews Performance by region Operating profit before Revenue (£m) exceptional items1 (£m) 2007 2006 2007 2006 Africa 131.3 111.4 11.4 9.8 Asia 54.4 54.8 4.8 4.3 Europe 113.8 113.6 15.8 14.9 ------- ------- ------- --------Total 299.5 279.8 32.0 29.0 ------- ------- ------- -------- Africa The economic and political climate in Nigeria remains stable and positivefollowing the elections held in mid 2007, which saw the first transition fromone democratically elected government to another. There has been a noticeablecontinuation of the positive reforms begun by the previous administrationleading to good consumer confidence in the country. Overall, performance in Nigeria has been strong with both revenue andprofitability up on the same period last year. Whilst results have again beenimpacted on translation by the further weakening of the US dollar, this impacthas been partially countered by a slight strengthening in the Nigerian Naira. The Nigerian business continues to be separated into the following businessunits: • Soaps and detergents • Health and beauty • Electrical goods (HPZ, a joint venture with Haier) • Food and nutrition (Nutricima, a joint venture with Glanbia) • Supply chain and distribution Soaps and detergents performed well in the period despite an increasinglycompetitive environment and continued pressure on margins as a result of furtherincreases in commodity costs. New product launches in the period included Jetmulti-purpose economy detergent and a relaunch of Elephant Colour detergent. Sales of health and beauty products were higher than the same period last yearacross the portfolio of Robb (medicaments), Venus, Joy and Carex (personal care)and Cussons Baby. The Pan-African relaunch of the Venus and Joy brands continuedwith further product launches during the period in Nigeria, Ghana and Kenya. Significant top line growth continues in the electrical goods business as aresult of increasing consumer spending power and a strong brand name (HaierThermocool). During the period, the product portfolio was extended with theofficial launch of commercial air-conditioners. The recently opened Lagosshowroom has proved successful with luxury items performing particularly well.Further initiatives currently being actioned include the opening of additionalshowrooms, the roll-out of nationwide service centres and the opening of acustomer care centre. The milk and nutrition joint venture with Glanbia continues to make steadyprogress and whilst milk costs have continued to rise, selling price increaseshave been achieved in the period. Volumes have also increased during the periodwith the business now benefiting from the first full year of sales from thethree major brands of Nunu, Coast and Powerfist. Following the period end,global milk costs have begun to move downwards from their record highs. In supply chain and distribution, as noted in the major projects section, themain focus is the two stage review of the Nigerian manufacturing facilities. Revenue and profitability in Ghana was ahead of the same period last year as aresult of both growth and margin improvement. Sales of both electrical andnutrition products are continuing to progress well. First half results in Kenya were in line with the same period last year,although recent political events are now expected to have a small impact on fullyear performance. Asia The market for branded detergent products in Australia became very competitivelast year, as a result of the introduction of private label ranges by the twomajor supermarket chains. Whilst the competitive conditions in Australiacontinue, there have been a number of new product launches in the period whichhave helped to contribute to improved profitability versus the same period lastyear. These launches include a new water saving technology called 'Aquasave'which has been applied to both laundry and dishwash detergents. In Indonesia, the extensions to the baby brand that were launched in the secondhalf of the last financial year are proving successful, and are furtherstrengthening the brand's number one position in the market. These extensionsinclude a 'Baby Needs' range of products such as bottles, plates and feedingspoons and a new 'basics' range called Cussons Sahaja. Revenue and profitabilityfor Indonesia, together with the other Asian units, Thailand, Malaysia and theMiddle East, were at a similar level to the same period last year. Europe In the UK, performance has been strong across the portfolio of Imperial Leather,Original Source, Carex, Charles Worthington and Morning Fresh brands, withimprovements in both revenue and profitability versus the same period last year.The business has retained the number one position in the Personal Wash category,with a number of new variant and range extensions launched in the period.Significant brand support campaigns were also run, including a new ImperialLeather 'Huggable Snuggable Skin' television advertisement and a rerun of thesuccessful 'Charles Worthington Goes to Your Head' television and printcampaign. Supply chain efforts are largely concentrated on the move ofmanufacturing from the current site to the new facility which will beginoperation in the coming months. Finally, in the UK, the Group announcedproposals to close its final salary pension arrangements with effect from 31stMay 2008, both to protect itself from rising costs but also as part of a moremodern global remuneration structure. In Poland, focus has been on the two core brands of 'E' (clothes detergent,fabric conditioner and household cleaning products) and Luksja (bar soaps andshower gels) with profitability at a similar level to the same period last year.Supply chain efficiencies are now being maximised following the consolidation ofmanufacturing operations onto one site which has been achieved over the last fewyears. Profitability in Greece is ahead of the same period last year following furthermarket share gains across the Minerva range which was relaunched and rebrandedlast year. During the period, a small local butter brand was purchased tostrengthen the overall brand portfolio. Exceptional items Exceptional items for the period ended 30th November 2007 relate to gains on thedisposal of property in the UK. Further details are given in note 4. Taxation The effective tax rate before exceptional items was 29% which is in line withthe previous full year. Directors Mr Mike Smith, non-executive director, will retire from the board on 31st May2008. Mr Simon Heale joined the board as non-executive director on 1st January2008. Outlook The outlook for the full year remains positive, despite rising raw materialcosts and the weak dollar. In the Group's largest market, Nigeria, the continued political stability andimproving economic prospects give cause for optimism. In the UK, the Group's second biggest market, good performance is expected tocontinue despite some signs of reduced consumer spending power. The acquisition of The Sanctuary brand and spa provides further opportunities tostrengthen our leading position in the UK. The Group's balance sheet remains strong with only a small net debt positionfollowing the Sanctuary acquisition. Overall performance since the period end has been in line with expectations. Principal risks and uncertainties facing the Group Our principal risks and uncertainties for the remaining six months of thefinancial year remain as stated on page 27 of our 2007 Annual Report which isavailable on our website at www.pzcussons.com. Consolidated Income Statement Unaudited Unaudited Audited ------------------------ --------- --------------------- Before Excep- Before Excep- excep- tional Half-year Half-year Excep- tional tional items to 30th to 30th tional items Year items (note 4) Nov- Nov- items (note 4) to 31st ember ember May 2007 2006 2007 Total Total Total Note £m £m £m £m £m £m £m -------- -------- ------- -------- ------- ------- ------ContinuingoperationsRevenue 3 299.5 - 299.5 279.8 577.9 - 577.9Cost of sales (182.8) - (182.8) (171.7) (365.9) - (365.9) -------- -------- ------- -------- ------- ------- ------ Gross profit 116.7 - 116.7 108.1 212.0 - 212.0Selling anddistributionexpenses (54.7) - (54.7) (47.8) (86.1) - (86.1)Administrative (30.8) 2.9 (27.9) (31.3) (58.9) (0.4) (59.3)expensesShare of 0.8 - 0.8 - (0.8) - (0.8)results of -------- -------- ------- -------- ------- ------- ------joint ventureOperating 3 32.0 2.9 34.9 29.0 66.2 (0.4) 65.8profit -------- -------- ------- -------- ------- ------- ------ Finance income 1.5 - 1.5 1.8 2.8 - 2.8Finance costs (1.0) - (1.0) (0.6) (0.7) - (0.7) -------- -------- ------- -------- ------- ------- ------Net finance 5 0.5 - 0.5 1.2 2.1 - 2.1income -------- -------- ------- -------- ------- ------- ------ Profit before 32.5 2.9 35.4 30.2 68.3 (0.4) 67.9taxationTaxation 7 (9.4) (0.2) (9.6) (9.0) (19.8) 1.3 (18.5) -------- -------- ------- -------- ------- ------- ------ Profit for the 23.1 2.7 25.8 21.2 48.5 0.9 49.4period -------- -------- ------- -------- ------- ------- ------ Attributableto:Equity holders 19.9 2.7 22.6 17.7 41.5 0.9 42.4of the parentMinority 3.2 - 3.2 3.5 7.0 - 7.0interests -------- -------- ------- -------- ------- ------- ------ 23.1 2.7 25.8 21.2 48.5 0.9 49.4 -------- -------- ------- -------- ------- ------- ------ Basic EPS (p) 9 5.33 4.17 9.99Diluted EPS (p) 9 5.27 4.13 9.89 -------- -------- ------- -------- ------- ------- ------ Adjusted basic 9 4.69 4.17 9.78EPS (p)Adjusted 9 4.64 4.13 9.68diluted EPS ----- -------- -------- ------- -------- ------- ------- ------(p) There were no exceptional items in the period ended 30th November 2006. Consolidated Balance Sheet Unaudited Unaudited Audited 30th 30th 31st November November May 2007 2006 2007 £m £m £m ---------- ---------- ----------AssetsNon-current assetsGoodwill and other intangible assets 55.0 53.9 54.2Property, plant and equipment 147.7 137.1 143.2Investments in joint ventures (0.3) - (1.7)Other investments 0.7 0.7 0.8Receivables 0.1 0.1 0.1Non-current assets held for sale 5.8 4.6 2.6Retirement benefit surplus 23.1 23.4 23.1 ---------- ---------- ---------- 232.1 219.8 222.3 ---------- ---------- ---------- Current assetsInventories 162.9 158.9 150.4Receivables and prepayments 119.0 105.8 98.3Other investments 13.5 0.6 12.8Cash and short-term deposits 44.6 52.3 53.3Current taxation receivable 2.4 1.4 3.7 ---------- ---------- ---------- 342.4 319.0 318.5 ---------- ---------- ----------Total assets 574.5 538.8 540.8LiabilitiesCurrent liabilitiesBorrowings (17.9) (16.7) (5.8)Trade and other payables (104.0) (107.6) (95.7)Current taxation payable (11.9) (9.8) (11.2)Provisions (4.7) (1.0) (7.3) ---------- ---------- ---------- (138.5) (135.1) (120.0) ---------- ---------- ----------Non-current liabilitiesBorrowings - (1.0) -Other liabilities (0.7) (3.6) (1.4)Deferred tax liabilities (20.3) (24.4) (20.1)Retirement benefit obligation (37.2) (30.5) (37.2)Provisions (3.1) (8.8) (2.7) ---------- ---------- ---------- (61.3) (68.3) (61.4) ---------- ---------- ----------Total liabilities (199.8) (203.4) (181.4) ---------- ---------- ----------Net assets 374.7 335.4 359.4 EquityOrdinary share capital 4.3 4.3 4.3Capital redemption reserve 0.7 0.7 0.7Revaluation reserve 30.5 26.3 29.6Other reserve (3.0) (3.4) (3.0)Currency translation reserve 6.5 (3.0) 0.9Retained earnings 286.2 265.7 279.3 ---------- ---------- ----------Equity attributable to equityholders of the parent 325.2 290.6 311.8Equity minority interest 49.5 44.8 47.6 ---------- ---------- ----------Total equity 374.7 335.4 359.4 ---------- ---------- ---------- Consolidated Statement of Recognised Income and Expense Unau- Unau- dited dited Audited Half- Half- Year year to year to to 30th 30th Nov 31st November November May 2007 2006 2007 £m £m £m ------- ------- -------Actuarial losses on defined benefit pension schemes - - (8.3)Exchange differences on translation of foreign 6.9 (8.8) (4.0)operationsTaxation on items taken directly to equity - - 4.1 ------- ------- -------Net income / (expense) recognised directly in equity 6.9 (8.8) (8.2)Profit for the period 25.8 21.2 49.4 ------- ------- -------Total net income and expense recognised for the 32.7 12.4 41.2period ------- ------- -------Attributable to:Equity holders of the parent 27.8 11.3 35.9Minority interests 4.9 1.1 5.3 ------- ------- ------- Consolidated Cash Flow Statement Unau- Unau- dited dited Audited Half- Half- Year year to year to to 30th 30th Nov 31st November November May 2007 2006 2007 £m £m £m ------- ------- -------Operating activities Cash generated from operations 10.5 25.9 58.7(note 10)Taxation (6.8) (8.7) (19.3) ------- ------- -------Net cash flow from operating 3.7 17.2 39.4activities ------- ------- ------- Investing activitiesInvestment income received 1.5 2.1 3.1Purchase of property, plant and (15.6) (12.5) (27.5)equipmentSale of property, plant and 6.7 2.1 12.6equipmentPurchase of intangible assets (0.6) - -Loans to joint venture companies - (8.7) (0.5)Net cash balances disposed of with - - (1.0)subsidiary undertakingProceeds from disposal of - - 2.5subsidiarySale / (purchase) of current asset 0.6 1.6 (10.4)investments ------- ------- -------Net cash flow from investing (7.4) (15.4) (21.2)activities ------- ------- ------- Financing activitiesInterest paid (1.0) (0.6) (0.7)Dividends paid to minority shareholders (2.0) (2.9) (2.3)in subsidiary companies companiesPurchase of shares for ESOT - (0.5) (0.5)(Employee Share Option Trust)Ordinary dividends paid (13.9) (12.5) (16.7)Net (decrease) / increase in (0.6) 4.0 (1.9)short-term borrowings ------- ------- -------Net cash flow from financing (17.5) (12.5) (22.1)activities ------- ------- ------- Net decrease in cash and cash (21.2) (10.7) (3.9)equivalentsCash and cash equivalents at the 50.1 53.9 53.9beginning of the periodEffect of foreign exchange rates (0.3) (0.4) 0.1 ------- ------- -------Cash and cash equivalents at the 28.6 42.8 50.1end of the period ------- ------- ------- Notes 1. Basis of preparation These interim financial statements for the period ended 30th November 2007,which are neither audited nor reviewed by the auditors, have been prepared inaccordance with the Disclosure and Transparency Rules (DTR) of the FinancialServices Authority and with IAS 34, 'Interim financial reporting' as adopted bythe European Union (EU). The interim financial statements should be read inconjunction with the annual financial statements for the year ended 31st May2007, which have been prepared in accordance with International FinancialReporting Standards (IFRS) as adopted for use in the European Union (EU),including International Accounting Standards (IAS) and interpretations issued bythe International Financial Reporting Interpretations Committee (IFRIC). The interim financial statements for the period ended 30th November 2007 do notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985. The financial information set out in this statement relating to the year ended31st May 2007 does not constitute statutory accounts for that period. Fullaudited accounts of the PZ Cussons Group in respect of that financial period inaccordance with IFRS, which received an unqualified audit opinion and did notcontain a statement under either Section 237(2) or (3) of the Companies Act1985, have been delivered to the Registrar of Companies. 2. Accounting policies The accounting policies adopted are consistent with those adopted in thepreparation of the annual financial statements for the year ended 31st May 2007as described in the financial statements. The Group has considered all amendments to current standards andinterpretations, together with all new standards and interpretations and has notidentified any significant changes relevant to these accounts. In respect of accounting for pension assets and liabilities the balances,assumptions and asset values used are the same as those adopted at 31st May2007. 3. Segmental analysis The Group's primary segment reporting is by geographic sector with businesssector reporting being the secondary segment. The Group has three geographicalsectors which are based on the location of customers and consist of Africa, Asiaand Europe. The Group has one main business sector, being toiletries andhousehold products. Geographic segments (unaudited) 6 months to 30th November 2007 Africa Asia Europe Eliminations Total £m £m £m £m £m---------------------------- ------ ------ ------- --------- ------Total gross segment revenue 131.3 65.0 193.1 (89.9) 299.5Inter segment revenue - (10.6) (79.3) 89.9 ----------------------------- ------ ------ ------- --------- ------ Revenue 131.3 54.4 113.8 - 299.5---------------------------- ------ ------ ------- --------- ------ Segmental operating profit before 11.4 4.8 15.8 - 32.0exceptional itemsExceptional items (note 4) - - 2.9 - 2.9---------------------------- ------ ------ ------- --------- ------ Segmental operating profit 11.4 4.8 18.7 - 34.9---------------------------- ------ ------ ------- --------- ------ 6 months to 30th November 2006---------------------------- ------ ------ ------- --------- ------Total gross segment revenue 111.4 62.4 191.6 (85.6) 279.8Inter segment revenue - (7.6) (78.0) 85.6 ----------------------------- ------ ------ ------- --------- ------ Revenue 111.4 54.8 113.6 - 279.8---------------------------- ------ ------ ------- --------- ------ Segmental operating profit 9.8 4.3 14.9 - 29.0---------------------------- ------ ------ ------- --------- ------ 4. Exceptional items Period to 30th November 2007 (i) Profit on disposal of property, plant and equipment During the period the sale of the UK manufacturing site in Manchester resultedin an exceptional gain on disposal of £2.9 million. Period to 30th November 2006 There were no exceptional items in the period ended 30th November 2006. Year to 31st May 2007 (i) Restructuring of UK operations During the period a significant restructuring of the UK business made up ofredundancy and other associated restructuring costs gave rise to an exceptionalpre tax charge of £5.1 million. (ii) Profit on disposal of property, plant and equipment During the period the sale of the Polish head office in Warsaw resulted in anexceptional gain on disposal of £5.2 million, while a net loss of £0.5 millionwas realised in relation to the sale of the Cameroun business, due torationalisation of the Group's smaller operations. 5. Net finance income Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007 £m £m £m----------------------------------- ----------- ---------- ---------Current asset investment income:Net investment gains - - 0.1Interest and dividends receivable 1.5 1.8 2.7----------------------------------- ----------- ---------- --------- 1.5 1.8 2.8Interest payable on bank loans and (1.0) (0.6) (0.7)overdrafts ----------------------------------- ----------- ---------- --------- 0.5 1.2 2.1----------------------------------- ----------- ---------- --------- 6. Capital expenditure During the 6 months ended 30th November 2007 the Group acquired capitalequipment amounting to £15.8 million (H1 2006: £12.2 million) and disposed ofcapital equipment with a net book value of £3.1 million (H1 2006: £4.2 million). 7. Taxation Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007 £m £m £m---------------------------- ----------- ---------- ---------United Kingdom 4.4 2.9 6.4Overseas 5.2 6.1 12.1---------------------------- ----------- ---------- --------- 9.6 9.0 18.5---------------------------- ----------- ---------- --------- Income tax expense is recognised based on management's best estimate of theweighted average annual income tax rate expected for the full financial year.The estimated average annual tax rate used for the year to 31st May 2008 is 29%(the estimated tax rate for the first half to 30th November 2007 was 29%). 8. Dividends An interim dividend of 1.075p per share for the half-year to 30th November 2007(H1 2006: 1.000p) has been declared totalling £4.6 million (H1 2006: £4.2million) payable on 7th April 2008 to ordinary shareholders on the register on29th February 2008. This interim dividend has not been recognised in this halfyearly report. The proposed final dividend for the year ended 31st May 2007 of3.27p per share, totalling £13.9 million, was approved by shareholders at theannual general meeting of the company and paid on 26th September 2007. 9. Earnings per share Basic earnings per share and diluted earnings per share are calculated bydividing profit for the period, after payment of any preference dividends, bythe following weighted average number of shares in issue: Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007------------------------------ ------------ ------------- -----------Basic weighted average (000) 424,348 424,810 424,348------------------------------ ------------ ------------- -----------Diluted weighted average (000) 428,725 428,720 428,725------------------------------ ------------ ------------- ----------- The difference between the basic and diluted weighted average number of sharesrepresents the dilutive effect of the deferred annual share bonus scheme and theexecutive share option scheme. The basic and diluted earnings per share for the period are as follows: Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007------------------------------ ------------ ------------- -----------Basic earnings per share:- Adjusted basic earnings per 4.69p 4.17p 9.78p share- Exceptional items 0.64p - 0.21p------------------------------ ------------ ------------- ----------- - Basic earnings per share 5.33p 4.17p 9.99p------------------------------ ------------ ------------- ----------- Diluted earnings per share:- Adjusted diluted earnings 4.64p 4.13p 9.68p per share- Exceptional items 0.63p - 0.21p------------------------------ ------------ ------------- ----------- - Diluted earnings per share 5.27p 4.13p 9.89p------------------------------ ------------ ------------- ----------- 10. Reconciliation of operating profit to net cash generated from operatingactivities Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007 £m £m £m--------------------------------------------- -------- -------- -------Profit before taxation 35.4 30.2 67.9Adjustment for finance income (0.5) (1.2) (2.1)--------------------------------------------- -------- -------- ------- Operating profit 34.9 29.0 65.8 Depreciation and adjustments on disposals 4.1 6.5 7.3Loss on sale of termination of operation - - 0.5Share of result from joint ventures (0.8) - 0.8Add back charge for shares purchased for ESOT - - 0.4--------------------------------------------- -------- -------- -------Operating cash flows before movements in 38.2 35.5 74.8working capitalMovements in working capital:Inventories (9.5) (21.9) (12.6)Receivables (18.8) (11.9) (11.0)Payables 2.9 24.0 7.2Provisions (2.3) 0.2 0.3--------------------------------------------- -------- -------- -------Cash generated from operations 10.5 25.9 58.7--------------------------------------------- -------- -------- ------- 11. Condensed reconciliation of movement in consolidated equity Unaudited Unaudited Audited Half-year to Half-year to Year to 30th November 30th November 31st May 2007 2006 2007 £m £m £m--------------------------------------------- -------- -------- -------Total net income recognised for the period 32.7 12.4 41.2Ordinary dividends (13.9) (12.5) (16.7)Shares purchased for ESOT - - (0.5) (0.5)Shares to be awarded from ESOT - - 0.4Share-based payments - - (0.1)Minority interest dividend charged (3.5) (2.4) (3.3)--------------------------------------------- -------- -------- -------Net increase / (decrease) in equity for the 15.3 (3.0) 21.0periodOpening equity 359.4 338.4 338.4--------------------------------------------- -------- -------- -------Closing equity 374.7 335.4 359.4--------------------------------------------- -------- -------- ------- Attributable to:Equity shareholders of the parent 325.2 290.6 311.8Minority interests 49.5 44.8 47.6--------------------------------------------- -------- -------- ------- 12. Related party transactions The following related party transactions were entered into by subsidiarycompanies during the year under the terms of a joint venture agreement withGlanbia Plc: At 30th November 2007 the outstanding balance receivable from Milk Ventures (UK)Ltd was £12.8 million (31st May 2007: £13.3 million). At 30th November 2007 theoutstanding balance payable to Milk Ventures (UK) Ltd was £0.1 million (31st May2007: nil). The Group sourced and then sold fixed assets and raw materials to Nutricima Ltdto the value of £23.1 million (31st May 2007: £30.7 million). At 30th November2007 the amount outstanding from Nutricima Ltd was £5.4 million (31st May 2007:£2.8 million). Nutricima Ltd sold £23.0 million (31st May 2007: £34.9 million) of goods to PZCussons Nigeria Plc. The amount outstanding from PZ Cussons Nigeria Plc at 30thNovember 2007 was £4.5 million (31st May 2007: £3.5 million). All trading balances will be settled in cash. There were no provisions for doubtful related party receivables at 30th November2007 (H1 2006: nil) and no charge to the income statement in respect of doubtfulrelated party receivables (H1 2006: nil). 13. Post balance sheet event On 29th January 2008, PZ Cussons Plc completed the acquisition of The SanctuarySpa Holdings Limited, a distributor of body care products and provider of healthand leisure services based in London. The total consideration of the acquisitionwas £75 million (excluding costs) on a cash and debt free basis. Due to the recent completion of the acquisition, the detailed analysis of thefair values of the significant assets and liabilities assumed will be publishedin the Annual Report for the year ending 31st May 2008. Statement of Directors' Responsibilities The Directors' confirm that this condensed set of financial statements has beenprepared in accordance with IAS 34 as adopted by the European Union, and thatthe interim management report herein includes a fair review of the informationrequired by DTR 4.2.7 and DTR 4.2.8. The Directors of PZ Cussons Plc are listed in the PZ Cussons Plc Annual Reportfor 31st May 2007, with the exception of Mr S J N Heale who was appointed on 1stJanuary 2008. By order of the Board Brandon Leigh Finance Director 29th January 2008 This information is provided by RNS The company news service from the London Stock Exchange