TIDMPZC
RNS Number : 8313M
PZ CUSSONS PLC
26 January 2021
26 January 2021
INTERIM ANNOUNCEMENT OF RESULTS
FOR THE HALF YEAR TO 30 NOVEMBER 2020
Revenue and profit growth in all Regions; balance sheet
strong
PZ Cussons PLC, a leading consumer products group, announces its
interim results for the six months ended 30 November 2020.
Half year (Restated)* Reported Constant
to 30 November Half year % change currency
2020 to % change(2)
Adjusted(1) results (before exceptional 30 November
items) 2019
Revenue from continuing operations GBP312.9m GBP284.0m 10.2% 14.6%
Adjusted operating profit from
continuing operations GBP36.4m GBP32.2m 13.0% 14.8%
Adjusted profit before tax from
continuing operations GBP34.9m GBP30.0m 16.3% 18.7%
Adjusted profit for the period
from continuing operations GBP27.0m GBP23.2m 16.4%
Adjusted basic earnings per share
from continuing operations 6.67p 5.76p 15.8%
Net debt(3) (GBP18.2m) (GBP137.7m)
Reported results (IFRS) (after
exceptional items)
Revenue from continuing operations GBP312.9m GBP284.0m 10.2%
Operating profit from continuing
operations GBP37.8m GBP39.0m (3.1%)
Profit before tax from continuing
operations GBP36.3m GBP36.8m (1.4%)
Profit for the period from continuing
operations GBP28.4m GBP30.7m (7.5%)
Basic earnings per share from continuing
operations 6.81p 7.55p (9.8%)
Basic earnings per share from continuing
& discontinued operations 3.42p 7.10p (51.8%)
Interim dividend per share 2.67p 2.67p -
(1) Exceptional items before tax (2020: expense GBP11.4m -
continuing operations GBP1.4m income, discontinued operations
GBP12.8m expense; 2019: income GBP6.7m - all continuing operations)
are detailed in note 4.
(2) Constant currency comparison. See page 3 for a definition of
constant currency.
(3) Net debt, above and hereafter, is defined as cash,
short-term deposits and current asset investments, less bank
overdrafts and borrowings. It does not include IFRS 16 lease
liabilities of GBP12.1m (2019: GBP9.9m) (refer to note 11).
* The results for the half year to 30 November 2019 have been
restated to reflect discontinued operations and prior year
adjustments. Further details are set out in note 16 and 2.
Group Highlights
-- Revenue growth of 14.6% with growth in all Regions.
-- Focus Brands revenue grew 21.9% driven by Carex, Morning Fresh, Cussons Baby and St Tropez.
-- Adjusted operating profit of GBP36.4m, increased 14.8%,
driven by improved performance in all Regions partially offset by
increased Central investment in capabilities.
-- Growth in adjusted operating margin despite increased
investment in marketing and organisational capabilities.
-- Adjusted profit before tax of GBP34.9m, an increase of 18.7%
reflecting the increase in adjusted operating profit and a lower
interest charge.
-- Reported profit before tax of GBP36.3m, slightly below last
year due to the profit on disposal of our Greece business last
year, and in this year exceptional costs primarily related to
Nigeria.
-- Balance sheet continues to strengthen with net debt of
GBP18.2m versus GBP137.7m last year, with undrawn financing
facilities at 30(th) November 2020 of GBP217m.
-- Interim dividend maintained in line with last year at 2.67p per share.
-- Capital markets day scheduled for 25 March.
Europe & the Americas Highlights
-- Unprecedented growth in hand wash and hand sanitiser
categories but demand remains volatile and increased competition
from new market entrants especially in hand sanitiser.
-- Revenue growth of 32.6% driven by Carex, the #1 choice of
consumers in both the hand wash and hand sanitiser categories.
-- Imperial Leather adversely impacted by the prioritisation of
Carex production with re-listing of products late in Q2. Original
Source saw growth in its core proposition but declined due to a
reduction in promotional activity and the simplification of its
portfolio.
-- Beauty revenue showed a modest reduction with on-line
performance of St Tropez and Sanctuary almost offsetting the
decline in the UK high street.
-- Adjusted operating profit of GBP27.3m, 33.2% ahead of last
year with growth in both the UK and Beauty. Reported operating
profit was GBP27.2m.
Asia Pacific Highlights
-- Revenue increased by 4.2% with growth in key markets of Australia and Indonesia.
-- Market share continued to grow in Australia Home Care and in
key categories for Cussons Baby in Indonesia.
-- Morning Fresh and Cussons Baby delivered improved revenue
results and Rafferty's Garden returned to growth.
-- Adjusted operating profit of GBP11.7m grew by 48.1% with both
Australia and Indonesia increasing due to higher revenue and
improved margins. Reported operating profit was GBP11.1m.
Africa Highlights
-- Revenue grew in Africa by 5.9% driven by growth in all
categories across our Nigerian business.
-- Electricals, Morning Fresh, Cussons Baby and Premier all
increased revenue together along with growth in some of our smaller
brands.
-- Adjusted operating profit of GBP2.3m reflected both increased
revenue and margin improvement in Nigeria offsetting transactional
foreign exchange losses. Reported operating profit was GBP4.6m.
-- Improved operating profit performance in Kenya, Ghana and our joint venture, PZ Wilmar.
-- Completion of the disposal of Nutricima, our Nigerian milk business on 28 September.
-- Simplification project for Nigeria commenced, with a planned
review of portfolio, route to market, organisational design,
structure capabilities and assets. First stage completed.
Central
-- Higher costs in first half reflects the increased investment
in capabilities including digital, marketing and strategy.
Outlook
We saw renewed momentum in our business in the first half of our
financial year, with delivery of top and bottom line growth
allowing for increased investment in both marketing and
organisational capabilities. Initial steps have been taken to turn
around the business but these are only the start of a multi-year
programme to return to sustainable profit growth.
In the second half we expect continued economic uncertainty
associated with COVID-19, the risk of weaker consumer confidence
combined with already evident upward cost pressure. Despite these
external headwinds we plan to continue to increase investment in
our brands.
Assuming no material change to anticipated COVID restrictions or
resulting consumer behaviour, we expect to perform in line with the
current range of market expectations for this financial year.
Commenting today, Caroline Silver (Chair) said:
"The organisation has been stabilised in the last twelve months
with the arrival of Jonathan Myers as CEO and his new management
team.
Our fast start to this financial year was maintained with the
Group delivering strong growth in revenue and adjusted profit
across all Regions, notwithstanding increased investment in
marketing and organisational capabilities.
In the second half of this year, with our recent strategy review
moving into execution, we expect further progression in brand
building, the continued turnaround of key brands and the
implementation of our simplification project in Nigeria.
The external environment continues to remain very challenging
and volatile but we remain focused on developing our strategic
plans that will benefit all stakeholders in the longer term.
The Board has declared an interim dividend of 2.67p in line with
our last financial year 2020. We are pleased with progress to date
and confident in our future plans but remain cautious given the
external environment".
Also commenting today, on the strategy update, Jonathan Myers
(CEO) said:
"Our focus in the first half of this year has been to deliver a
fast start for the business, with emphasis on profitable revenue
growth as well as maintaining our strong balance sheet discipline.
We saw this as essential to reset both in terms of organisational
pace and agility to adapt to changing consumer and shopper
habits.
In parallel, we completed our review of the strategy to become a
brand-led and consumer-focused organisation, delivering sustainable
profitable growth with hygiene, baby and beauty at our core. We
look forward to sharing our plans with you in more detail at a
capital markets day on 25 March".
Press Enquiries
PZ Cussons
Alan Bergin (Interim Chief
Financial Officer) 0161 435 1236
Instinctif 07949 939 237 / 07917
Tim Linacre / Guy Scarborough 178 920
Investor and Analyst conference call
Management will be hosting a conference call for investors and
analysts at 9:30am (UK Time) today. Please call Guy Scarborough at
Instinctif Partners for dial-in details on 07917 178 920 or email
Guy.Scarborough@instinctif.com
The presentation slides to accompany the conference call are
available to download from the Company's website at
www.pzcussons.com.
Basis of Preparation
The accounting policies applied in our interim financial
statements are consistent with those of the annual financial
statements for the year ended 31 May 2020. The Directors continue
to adopt the going concern basis in preparing the accounts on the
basis that the Group's strong liquidity position is sufficient to
meet the Group's forecast funding needs, including those modelled
in a downside case.
The discontinued operations presented include Nutricima Ltd as
the assets of this business were disposed of on 28 September 2020,
with proceeds of GBP17.1m. The exceptional costs associated with
this disposal relate largely to the unwinding of the accounting for
historic foreign exchange reserves. As noted in our year-end report
for 31st May 2020 we expect this to amount to an exceptional charge
in total of GBP34.2m once all inter-company loans are extinguished.
These inter-company loans have been impaired to their recoverable
value in prior periods. This exceptional charge will not impact
cash.
In our Financial Statements we use alternative performance
measures such as adjusted operating profit and constant currency
measures that are not recognised under IFRS. These metrics are used
to allow the readers of the Financial Statements to obtain a more
consistent comparison of the underlying performance of the Group by
adjusting for certain items which, if included, could distort the
understanding of the Group's performance and comparability between
periods. The same measures are used by management for planning,
budgeting and reporting purposes and for the internal assessment of
operating performance across the Group. The adjusted presentation
is adopted on a consistent basis for the purposes of the half year
and full year reporting. Where relevant, comparative IFRS measures
have also been presented.
Adjusted results are presented on a continued basis and before
exceptional items. In the current period exceptional items include
the profit on the sale of land by PZ Cussons Nigeria as a result of
the Nutricima disposal, offset by costs associated with the
expansion of our Group Strategy project to include the first stage
of our Nigeria simplification. This first stage has involved
incurring redundancy costs and the write-down of assets due to the
closure of our Coolworld retail electrical stores in Nigeria.
The adjusted and reported results for the current period are
presented with variances to prior period results and also as
variances between the current and prior period on a constant
currency basis. The constant currency impact has been derived by
retranslating the 2019 result using 2020 foreign currency exchange
rates. The translational impact was a GBP10.9 million loss on
revenue, a GBP0.5 million loss on adjusting operating profit, and a
GBP0.5 million loss on adjusted profit before tax.
In terms of segmentation our three operating Regions are
represented and in addition our Central revenue and costs. Central
refers to the activities in terms of revenue and costs of our
fragrance house and in terms of cost the expenditure associated
with the Global HQ, our non-market facing functions and global
costs net of recharges to our Regions.
The following Group and Regional performance commentary is
presented on a continuing operations basis. All growth percentages
are stated in constant currency and operating profit is stated and
discussed on an adjusted basis unless otherwise noted.
Business Review: Group Performance
Revenue at GBP312.9m increased by 14.6% versus last year with
growth in all three Regions. Europe & Americas was our star
performer with outstanding growth related to the performance of
Carex as a result of the demand for hand wash and hand sanitiser
associated with the COVID-19 pandemic, allied to a strong
performance in Asia Pacific and an improved performance in
Africa.
Adjusted operating profit at GBP36.4m was 14.8% higher than last
year with growth in all three Regions. There was excellent profit
growth in the UK with Beauty also growing profit despite a modest
reduction in revenue driven by the decline in the UK high street.
Indonesia and Australia delivered an increase in operating profit
with improvements in revenue and margin. Nigeria grew profit with
increased revenue and improved margin offsetting transactional
foreign exchange losses. In the first half of the year there was
also increased investment in marketing and organisational
capabilities.
On an IFRS basis, reported operating profit was GBP37.8m (2019:
GBP39.0m), with the decline driven by the profit on disposal of our
Greek business last year and exceptional costs related to the
extension of our Group Strategy project to include Nigeria
simplification, offset by the profit on the sale of land by PZ
Cussons Nigeria as a result of the Nutricima disposal.
Business Performance: Regional Performance
Continuing operations
Constant
2019 currency
(restated) Reported % change
Revenue (GBPm) 2020 (3) % change (1)
Europe & the Americas 117.1 88.4 32.5% 32.6%
Asia Pacific 95.9 94.2 1.8% 4.2%
Africa 94.9 98.2 (3.4%) 5.9%
Central 5.0 3.2 56.3% 56.3%
------ ------------ ---------- ----------
312.9 284.0 10.2% 14.6%
------ ------------ ---------- ----------
Constant
2019 currency
Adjusted operating profit/(loss) (restated) Reported % change
before exceptional items (2) (GBPm) 2020 (3) % change (1)
Europe & the Americas 27.3 20.5 33.2% 33.2%
Asia Pacific 11.7 8.2 42.7% 48.1%
Africa 2.3 1.7 35.3% 43.8%
Central (4.9) 1.8 (372.2%) (388.2%)
------ ------------ ---------- ----------
36.4 32.2 13.0% 14.8%
------ ------------ ---------- ----------
Constant
2019 currency
Reported (IFRS) operating profit/(loss) (restated) Reported % change
after exceptional items (2) (GBPm) 2020 (3) % change (1)
Europe & the Americas 27.2 18.3 48.6% 48.6%
Asia Pacific 11.1 8.0 38.8% 44.2%
Africa 4.6 1.7 170.6% 206.7%
Central (5.1) 11.0 (146.4%) (146.8%)
------ ------------ ---------- ----------
37.8 39.0 (3.1%) (1.6%)
------ ------------ ---------- ----------
(1) Constant currency comparison.
(2) Exceptional items before tax (2020: income GBP1.4m; 2019:
income GBP6.7m) are detailed in note 4.
(3) The prior year balances have been restated for change in the
segementation of the business as described in note 3.
Europe & the Americas
Revenue at GBP117.1m (2019: GBP88.3m) grew by 32.6% versus last
year with growth in adjusted operating profit to GBP27.3m (2019:
GBP20.5m).
As a result of the COVID-19 pandemic, there has been
unprecedented growth in the hand wash and especially the hand
sanitiser categories in the UK. However demand continues to remain
volatile and difficult to predict. We also see an increase in
competition with new market entrants especially in hand
sanitiser.
Despite this in the first half of this financial year we have
continued to see high demand for our Carex brand. The COVID-19
pandemic has seen consumers, especially in the hygiene category,
favour tried and trusted brands such as Carex. This has resulted in
Carex maintaining the #1 position in the significantly enlarged UK
market for hand wash and also hand sanitiser. Carex accounts for
over 37% of the hand wash market and over 27% of the hand sanitiser
market (Kantar, value share, for 52 weeks to December 1(st)
2020).
Carex has driven an improvement in UK revenue compared to last
year. Imperial Leather was adversely impacted by the prioritisation
of Carex but we expect the full listing to be in place during the
second half of the year. Shower and bath products were also
impacted by increased competition. Original Source delivered growth
in its core proposition but overall revenue declined due to a
reduction in promotional activity and simplification of the
portfolio.
Beauty revenue was modestly down on last year, mainly due to UK
high street performance adversely impacting our Sanctuary and hair
brands; Charles Worthington and Fudge.
The increased focus on on-line together with our hero products
led Sanctuary to offset some of the adverse impact of the UK high
street. St Tropez delivered good revenue growth in the first half
with an improved performance on-line in the US and UK leading to an
increase in self-tan sales allied to continued success of the
innovations launched. On-line continues to be a key platform for
our Beauty brands and an area of investment. Our on-line sales
increased year-on-year to around 38% of our total Beauty revenue as
we continue to grow our digital route to market.
Adjusted operating profit for the region grew due to the revenue
performance in the UK and increased profit in Beauty driven by the
improvement in margin. This was partially reduced by higher
marketing investment specifically on the Carex brand with increased
trade marketing costs at point of sale.
On an IFRS basis, reported operating profit was GBP27.2m (2019:
GBP18.3m), in line with adjusted operating profit.
Asia Pacific
Revenue at GBP95.9m (2019: GBP92.0m) grew by 4.2%, with adjusted
operating profit at GBP11.7m (2019: GBP7.9m), an increase of
48.1%.
Cussons Baby market share in Indonesia continued to grow in key
categories such as bath, cologne, hair lotion and wipes (Nielsen,
Scantrack November 2020). In Australia, Morning Fresh together with
our detergent brand Radiant grew market share (Nielsen, Grocery
Scan, December, 2020).
In Indonesia, revenue grew with growth from Cussons Baby
especially in the higher margin categories of baby cologne, baby
wash and baby hair lotion. Carex was launched with limited
distribution in the first half of the year and contributed to the
overall revenue growth.
Australia revenue was higher than last year driven by the
performance of our Home Care brands and Rafferty's Garden. Morning
Fresh continued to grow revenue driven by the impact of COVID-19
and the consumer preference for reliable, known brands. Radiant,
our detergent brand, also grew and we saw a return to growth for
Rafferty's Garden following the brand's restage in the second half
of last year. This offset the COVID-19 related decline in the
beauty category in Australia.
Adjusted operating profit at GBP11.7m (2019: GBP7.9m) grew by
48.1%, driven by growth in Indonesia with improved mix leading to
higher margins, and also Australia where revenue grew and
promotional costs were lower than last year. Profit was further
supported by some one-off costs incurred in the prior year by the
export business.
On an IFRS basis, reported operating profit was GBP11.1m (2019:
GBP8.0m), in line with adjusted results albeit including a charge
for re-organisation included as part of the Group structure and
systems project.
Africa
Revenue at GBP94.9m (2019: GBP89.6m) grew by 5.9% versus last
year, with an adjusted operating profit of GBP2.3m (2019:
GBP1.6m).
Revenue in Nigeria grew with our Personal Care, Home Care and
Electricals all ahead. Morning Fresh continued to deliver both
volume and price increases, with Cussons Baby returning to growth.
Premier core grew supported by a product re-stage in the second
half of last year but there was a decline for the Premier Cool
variant which was adversely impacted by a recent price
increase.
Electricals revenue was higher with price increases specifically
across our core ranges of washing machines and fridges offsetting
volume decline.
Overall adjusted profit increased as a result of the higher
revenue with all operating units delivering a profit. This
improvement was partially offset by transactional foreign exchange
losses in Nigeria arising from the scarcity of hard currency in the
market leading to an adverse financial impact in the conversion of
naira to US dollars.
On an IFRS basis, the reported operating profit was GBP4.6m
(2019: GBP1.7m) and includes the profit on the sale of land by PZ
Cussons Nigeria as part of the disposal of our Nutricima
business.
Central
Revenue at GBP5.0m (2019: GBP3.2m) grew versus last year with an
adjusted operating loss of GBP4.9m (2019: profit GBP1.7m).
Revenue refers to sales from our fragrance house and grew in the
first half as a result of the sale of low margin semi-finished
products to third parties as part of the enlarged Carex supply
chain.
Costs associated with Central reflect the expenditure for our
Global HQ and non-market facing functions net of recharges to our
regions and our fragrance house. The higher costs in first half
reflects the increased investment in capabilities including
digital, marketing and strategy and the inclusion in the prior year
of the income from the sale of a small brand.
On an IFRS basis, the reported operating loss was GBP5.1m (2019:
reported operating profit of GBP11.0m) with the movement largely
driven by the inclusion of profit from the sale of our business in
Greece last year.
Financial Review
Group adjusted operating margin was 11.6% (2019:11.3%) on
adjusted operating profit of GBP36.4m (2019: GBP32.2m) from revenue
of GBP312.9m (2019: GBP284.0m). The increase in adjusted operating
margin was driven by improved pricing and mix, partially offset by
a step up in marketing investment and capabilities as well as
partially offset by transactional foreign exchange losses in
Nigeria arising from the scarcity of hard currency in the market
leading to an adverse financial impact in the conversion of naira
to US dollars.
In Europe & the Americas adjusted operating margin was 23.3%
(2019: 23.2%), with the Region delivering margins growth due to a
reduction in promotional costs for hand wash and the positive
impact on mix of sanitizer sales. In addition, Beauty margins
improved due to the increase in St Tropez sales and higher sales of
Sanctuary hero products compared to gift sets and the reduction in
the overall contribution of the lower margin hair brands. This
growth in margin was largely offset by our decision to increase
marketing investment together with higher trade marketing costs in
the UK to improve execution in the market.
In Asia Pacific, adjusted operating margin increased to 12.2%
(2019: 8.7%), with the growth driven by improved price and mix in
Indonesia and a reduction in the mix from lower contribution
categories. Australia also saw a strong increase in margin due to a
reduction in promotion spend partially offset by the lower
contribution from the high margin beauty business.
In Africa, adjusted operating margin grew to 2.4% (2019: 1.7%)
driven by increased pricing in Electricals and a stronger price and
mix performance on the Personal and Home Care brands. This offset
foreign exchange losses due to scarcity in foreign currency.
Net finance costs of GBP1.5m (2019: GBP2.2m) were lower than
last year reflecting higher cash balances and lower borrowings as a
result of the proceeds from the disposals, improved working capital
management and payment of the final dividend later in the year. We
continue to reduce the draw down on our GBP325m credit facility
which had headroom at 30 November of GBP217m (2019: GBP147m).
Adjusted profit before tax at GBP34.9m (2019: GBP30.0m)
reflected the increased revenue across all three Regions partially
offset by higher investment in marketing and organisational
capabilities, and foreign exchange losses in Nigeria.
The effective tax rate on adjusted profit was 24.6% (2019:
24.3%) which is largely in line with last year and is a result of
the profit mix between regions.
Adjusted earnings per share of 6.67p (2019: 5.76p) increased by
15.8% as a result of the higher group profit.
Net exceptional income on a continuing basis was GBP1.4m. This
includes the profit on the sale of land by PZ Cussons Nigeria as a
result of the Nutricima disposal, offset by costs associated with
expansion of our Group Strategy project to include the first stage
of our Nigeria simplification and related to redundancy costs and
the write-down of assets due to the closure of our retail
electrical stores in Nigeria, Coolworld.
In the discontinued operations, the exceptional costs of
GBP12.8m relate mainly to the unwinding of the accounting for
historic foreign exchange reserves in relation to the disposal of
Nutricima. As noted in our year-end report for 31st May 2020 we
expect this recycling of foreign exchange reserves associated with
Nutricima to amount to an exceptional charge in total of GBP34.2m
once all intercompany loans associated with Nutricima have been
extinguished. This will not impact cash. See note 4 for further
details on exceptional items.
On an IFRS basis, reported profit before tax, including
discontinuing operations, was GBP36.3m (2019: GBP36.8m) a decline
of 1.4% largely driven by the profit on the disposal of our Greek
business last year and exceptional costs associated with the
expansion of our Group Strategy project to incorporate Nigerian
simplification offsetting the increase in profits this year.
Earnings per share from continuing operations was 6.81p (2019:
7.55p), a decline of 9.8%. From continuing and discontinued
operations, earning per share was 3.42p (2019: 7.10p)
Net debt, defined as cash, short-term deposits and current asset
investments, less bank overdrafts and borrowings and excluding IFRS
16 lease liabilities, at GBP18.2m (2019: GBP137.7m) reduced due to
proceeds from the disposals, payment of the final dividend for FY20
later in the year and increased focus across the business on
managing working capital and capital expenditure.
Total free cash flow, defined as cash generated from operating
activities less capital expenditure, was GBP33.0m (2019: GBP21.6m)
demonstrating the strong cash management in the year. The result
clearly shows the focus of the business amid volatility to reduce
stock, enforce trade terms and restrict investment. These results
also include the early payment of GBP8m in VAT as part of the UK
COVID-19 relief programme. PZ Cussons did not partake in the
furlough or COVID-19 Commercial paper programmes.
Our balance sheet remains strong with a net debt to adjusted
EBITDA ratio of 0.2 as at 30 November 2020 (2019: 1.5) and net
assets of GBP409.9m as at 30 November 2020 (2019: GBP436.1m). The
Group is funded by a GBP325 million Revolving Credit Facility
committed until 28 November 2023, with GBP217m in headroom as at 30
November 2020.
The Group's three UK pension schemes have an aggregate pension
accounting surplus under IAS 19 of GBP35.8m, after the restriction
due to asset ceiling (2019: GBP33.8m). The overseas schemes
reported a deficit of GBP7.6m (2019: GBP7.0m).
Brexit
As part of our risk management process we have been planning for
Brexit over a number of years. In summary, the initial impact of
Brexit on our business has been managed with only a small adverse
impact. The impact of tariffs remains small given our sourcing, our
EU customers continue to receive our products and across our key
lines we have the required raw materials. We are seeing some delays
in material supply and of course the wider economic impact will be
known later.
Related parties
Related party disclosures are given in note 14.
Principal risks and uncertainties facing the Group
Our principal risks and uncertainties are explained in more
detail in note 18 and remain as stated on pages 50 to 58 of our
2020 Annual Report and Accounts which is available on our website
at www.pzcussons.com.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Restated)*
Unaudited Unaudited Audited
Half year to Half year to Year to
30 November 2020 30 November 2019 31 May 2020
Before Exceptional Before Exceptional Before Exceptional
exceptional items exceptional items exceptional items
items (note 4) Total items (note 4) Total items (note 4) Total
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Continuing
operations
Revenue 3 312.9 - 312.9 284.0 - 284.0 587.2 - 587.2
Cost of sales (193.1) - (193.1) (176.4) - (176.4) (360.2) - (360.2)
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Gross profit 119.8 - 119.8 107.6 - 107.6 227.0 - 227.0
Selling and
distribution
costs (49.0) - (49.0) (43.8) - (43.8) (91.7) - (91.7)
Administrative
expenses (36.7) 1.4 (35.3) (33.3) 6.8 (26.5) (72.0) (32.7) (104.7)
Share of results
of
joint ventures 2.3 - 2.3 1.7 - 1.7 2.8 - 2.8
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Operating profit 36.4 1.4 37.8 32.2 6.8 39.0 66.1 (32.7) 33.4
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Finance income 0.5 - 0.5 0.5 - 0.5 0.9 - 0.9
Finance costs (2.0) - (2.0) (2.7) - (2.7) (5.0) - (5.0)
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Net finance
costs 5 (1.5) - (1.5) (2.2) - (2.2) (4.1) - (4.1)
------------- ------------- -------- ------------- ------------- --------
Profit before
taxation 34.9 1.4 36.3 30.0 6.8 36.8 62.0 (32.7) 29.3
Taxation 7 (7.9) - (7.9) (6.8) 0.7 (6.1) (14.7) 5.0 (9.7)
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Profit for the
period
from continuing
operations 27.0 1.4 28.4 23.2 7.5 30.7 47.3 (27.7) 19.6
Discontinued
operations 16
Loss from
discontinued
operations (3.1) (11.1) (14.2) (1.8) (0.1) (1.9) (2.4) (1.7) (4.1)
------------- ------------- -------- -------------
Profit for the
period 23.9 (9.7) 14.2 21.4 7.4 28.8 44.9 (29.4) 15.5
Attributable to:
Owners of the
Parent 24.8 (10.5) 14.3 22.3 7.4 29.7 48.5 (29.2) 19.3
Non-controlling
interests (0.9) 0.8 (0.1) (0.9) - (0.9) (3.6) (0.2) (3.8)
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
23.9 (9.7) 14.2 21.4 7.4 28.8 44.9 (29.4) 15.5
------------- ------------- -------- ------------- ------------- -------- ------------- ------------- --------
Basic and
diluted EPS
from continuing
operations
(p) 9 6.67 0.14 6.81 5.76 1.79 7.55 12.17 (6.57) 5.59
Basic and
diluted EPS
(p) 9 5.93 (2.51) 3.42 5.33 1.77 7.10 11.59 (6.98) 4.61
The results for the half year to 30 November 2019 have been
restated to reflect prior year adjustments. Further details are set
out in note 2.The notes on pages 13 to 27 are an integral part of
these condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Restated)*
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
------------- ------------- ---------
Profit for the period / year 14.2 28.8 15.5
Other comprehensive (expense) / income
Items that will not subsequently be
reclassified to profit or loss
Remeasurement of post-employment obligations
(note 12) (2.6) (1.3) 1.9
Deferred tax on remeasurement of post-employment
obligations 0.5 0.2 (0.4)
Total items that will not subsequently
be reclassified to profit or loss (2.1) (1.1) 1.5
------------- ------------- ---------
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations (6.0) (9.2) (6.6)
Cash flow hedges - fair value loss in
period / year (0.7) (0.2) (0.4)
Cost of hedging reserve - - 0.1
Recycle of equity reserves on disposal
of subsidiary - (8.6) (8.6)
Total items that may subsequently be
reclassified to profit or loss (6.7) (18.0) (15.5)
Other comprehensive expense for the
period / year (8.8) (19.1) (14.0)
Total comprehensive income for the period
/ year 5.4 9.7 1.5
------------- ------------- ---------
Attributable to:
Owners of the Parent 7.4 11.7 5.5
Non-controlling interests (2.0) (2.0) (4.0)
------------- ------------- ---------
*The results for the half year to 30 November 2019 have been
restated to reflect prior year adjustments. Further details are set
out in note 2.
The notes on pages 13 to 27 are an integral part of these
condensed consolidated interim financial statements.
(Restated)*
CONDENSED CONSOLIDATED BALANCE Unaudited Unaudited Audited
SHEET
30 November 30 November 31 May
2020 2019 2020
Notes GBPm GBPm GBPm
------------ ------------ --------
Assets
Non-current assets
Goodwill, software and other intangible
assets 6 303.5 350.9 304.4
Property, plant and equipment 6 97.1 124.1 106.9
Long term right of use assets 15 11.8 8.1 13.7
Net investments in joint ventures 40.0 38.1 40.9
Deferred taxation assets 16.9 9.5 15.4
Tax receivable 4.3 6.4 6.9
Retirement benefit surplus 12 40.4 38.3 42.9
------------ ------------ --------
514.0 575.4 531.1
------------ ------------ --------
Current assets
Inventories 92.2 118.4 104.6
Trade and other receivables 110.7 139.8 104.1
Derivative financial asset 13 0.8 1.3 0.7
Current tax receivable 10.2 8.0 9.6
Current asset investments 11 0.3 0.3 0.3
Cash and cash equivalents 11 89.5 39.9 78.7
303.7 307.7 298.0
------------ ------------ --------
Assets held for sale 16 - 2.4 20.5
------------ ------------ --------
Total assets 817.7 885.5 849.6
------------ ------------ --------
Equity
Share capital 4.3 4.3 4.3
Capital redemption reserve 0.7 0.7 0.7
Hedging reserve (0.7) 0.1 -
Currency translation reserve (104.6) (102.3) (100.6)
Other reserve (38.1) (39.0) (39.0)
Retained earnings 525.2 545.0 526.1
Attributable to owners of the
Parent 386.8 408.8 391.5
Non-controlling interests 23.1 27.3 25.4
------------ ------------ --------
Total equity 409.9 436.1 416.9
Liabilities
Non-current liabilities
Borrowings 11 108.0 178.0 127.0
Trade and other payables 0.6 0.9 0.4
Long term lease liability 15 9.2 9.9 10.4
Deferred taxation liabilities 65.9 66.1 64.4
Retirement benefit obligations 12 12.2 11.5 12.2
195.9 266.4 214.4
------------ ------------ --------
Current liabilities
Overdrafts 11 - - 1.2
Trade and other payables 166.6 142.7 161.8
Short-term lease liability 15 2.9 - 3.4
Derivative financial liabilities 13 1.2 0.7 0.9
Current taxation payable 38.1 38.2 47.8
Provisions 3.1 1.4 3.2
------------ ------------ --------
211.9 183.0 218.3
------------ ------------ --------
Total liabilities 407.8 449.4 432.7
------------ ------------ --------
Total equity and liabilities 817.7 885.5 849.6
------------ ------------ --------
*See note 2 for details of restatement
The notes on pages 13 to 27 are an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Parent
---------------------------------------------------
Currency Capital Non
Share translation redemption Retained Other Hedging controlling
capital reserve reserve Earnings reserve reserve interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 June 2019 (restated)* 4.3 (84.5) 0.7 538.8 (39.0) 0.3 29.2 449.8
------- ----------- ---------- -------- ------- ------- ----------- ------
Profit for the period - - - 29.7 - - (0.9) 28.8
Other comprehensive
(expense)/income
for the period (restated)* - (17.8) - - - (0.2) (1.1) (19.1)
------- ----------- ---------- -------- ------- ------- ----------- ------
Total comprehensive
(expense)/income
for the period - (17.8) - 29.7 - (0.2) (2.0) 9.7
------- ----------- ---------- -------- ------- ------- ----------- ------
Transactions with owners:
Ordinary dividends - - - (23.5) - - - (23.5)
Non-controlling interests dividend
paid - - - - - - (0.4) (0.4)
Non-controlling interests forfeited
dividend - - - - - - 0.5 0.5
------- ----------- ---------- -------- ------- ------- ----------- ------
Total transactions with owners
recognised
directly in equity - - - (23.5) - - 0.1 (23.4)
------- ----------- ---------- -------- ------- ------- ----------- ------
At 30 November 2019 (restated)* 4.3 (102.3) 0.7 545.0 (39.0) 0.1 27.3 436.1
------- ----------- ---------- -------- ------- ------- ----------- ------
At 1 June 2019 (restated)* 4.3 (84.5) 0.7 538.8 (39.0) 0.3 29.2 449.8
------- ----------- ---------- -------- ------- ------- ----------- ------
Profit for the year - - - 19.3 - - (3.8) 15.5
Other comprehensive
(expense)/income
for the year - (16.1) - 2.6 - (0.3) (0.2) (14.0)
------- ----------- ---------- -------- ------- ------- ----------- ------
Total comprehensive
(expense)/income
for the year - (16.1) - 21.9 - (0.3) (4.0) 1.5
------- ----------- ---------- -------- ------- ------- ----------- ------
Transactions with owners:
Ordinary dividends - - - (34.6) - - - (34.6)
Non-controlling interests dividend
paid - - - - - - (0.3) (0.3)
Non-controlling interests forfeited
dividend - - - - - - 0.5 0.5
------- ----------- ---------- -------- ------- ------- ----------- ------
Total transactions with owners
recognised
directly in equity - - - (34.6) - - 0.2 (34.4)
------- ----------- ---------- -------- ------- ------- ----------- ------
At 31 May 2020 4.3 (100.6) 0.7 526.1 (39.0) - 25.4 416.9
------- ----------- ---------- -------- ------- ------- ----------- ------
At 1 June 2020 4.3 (100.6) 0.7 526.1 (39.0) - 25.4 416.9
Profit for the period - - - 14.3 - - (0.1) 14.2
Other comprehensive (expense)/income
for the period - (4.0) - (2.1) - (0.7) (2.0) (8.8)
--- ------- --- ------ ------ ----- ----- ------
Total comprehensive (expense)/income
for the period - (4.0) - 12.2 - (0.7) (2.1) 5.4
--- ------- --- ------ ------ ----- ----- ------
Transactions with owners:
Ordinary dividends - - - (13.1) - - - (13.1)
Acquisition of non-controlling interests - - - - - - (0.2) (0.2)
Share based payments charges - - - - 0.9 - - 0.9
Total transactions with owners recognised
directly in equity - - - (13.1) 0.9 - (0.2) (12.4)
--- ------- --- ------ ------ ----- ----- ------
At 30 November 2020 4.3 (104.6) 0.7 525.2 (38.1) (0.7) 23.1 409.9
--- ------- --- ------ ------ ----- ----- ------
*See note 2 for details of restatement
The notes on pages 13 to 27 are an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Restated)*
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
------------- ------------- ---------
Cash flows from operating activities
Cash generated from operations (note 10) 35.4 24.4 137.7
Taxation paid (11.3) (11.9) (16.8)
Interest paid (note 5) (2.0) (2.8) (5.1)
------------- ------------- ---------
Net cash generated from operating activities 22.1 9.7 115.8
------------- ------------- ---------
Cash flows from investing activities
Interest income (note 5) 0.3 0.5 0.9
Investment income (note 5) 0.2 - -
Purchase of property, plant and equipment
and software (note 6) (2.4) (2.8) (6.7)
Proceeds from sale of assets 15.7 0.2 0.6
Acquisition of non-controlling interests (1.1) - -
Cash flow from disposal of companies &
businesses - 35.2 35.2
Advance of short term deposits to joint
venture - (0.5) (1.5)
Net cash used in investing activities 12.7 32.6 28.5
------------- ------------- ---------
Cash flows from financing activities
Dividends paid to non-controlling interests - (0.4) (0.3)
Dividends paid to Company shareholders
(note 8) - (23.5) (34.6)
Lease Payments (1.5) (1.4) (3.2)
Repayment of loan facility (note 11) (19.0) (28.0) (79.0)
Net cash used in financing activities (20.5) (53.3) (117.1)
Net increase/(decrease) in cash and cash
equivalents (note 11) 14.3 (11.0) 27.2
Cash and cash equivalents at the beginning
of the period (note 11) 77.5 51.9 51.9
Effect of foreign exchange rates (note
11) (2.3) (1.0) (1.6)
------------- ------------- ---------
Cash and cash equivalents at the end of
the period (note 11) 89.5 39.9 77.5
------------- ------------- ---------
The notes on pages 13 to 27 are an integral part of these
condensed consolidated interim financial statements.
1. Basis of preparation
The Company is a public limited company incorporated and
domiciled in England. It has a primary listing on the London Stock
Exchange. The address of its registered office is shown on page
30.
These condensed consolidated interim financial statements for
the six months ended 30 November 2020, which have been reviewed,
not audited, have been prepared in accordance with the Disclosure
and Transparency Rules (DTR) of the Financial Conduct Authority and
in accordance with IAS 34, 'Interim Financial Reporting' as adopted
by the European Union (EU). The condensed consolidated interim
financial statements should be read in conjunction with the annual
financial statements for the year ended 31 May 2020 which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the EU, including
International Accounting Standards (IAS) and interpretations issued
by the International Financial Reporting Standard Interpretations
Committee (IFRS IC).
The condensed consolidated interim financial statements for the
period ended 30 November 2020 do not constitute statutory accounts
within the meaning of section 434 of the Companies Act 2006.
The financial information set out in this statement relating to
the year ended 31 May 2020 does not constitute statutory accounts
for that year. Full audited statutory accounts of the Group in
respect of that financial year were approved by the Board of
Directors on 23 September 2020 and have been delivered to the
Registrar of Companies. The report of the auditors on these
statutory accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain a statement under section 498
of the Companies Act 2006.
These condensed consolidated interim financial statements were
approved for issue on 26 January 2021.
Judgements and estimates
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
annual financial statements for the year ended 31 May 2020.
Going concern basis
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Business Review. The financial position of the
Group and liquidity position are also described within the
Financial Position section of that review.
After making enquiries and having considered the availability of
resources, the Directors consider it appropriate to continue to
adopt the going concern basis in preparing the condensed
consolidated interim financial statements.
2. Accounting policies
The accounting policies are consistent with those of the annual
financial statements for the year ended 31 May 2020 except for as
described below. Taxes on income in the interim periods are accrued
using the tax rate that would be applicable to expected total
annual profit or loss before tax.
The Group has applied the following standards and amendments for
the first time for the annual reporting period commencing 1 June
2020:
-- Amendments to IFRS 3 - Business Combinations;
-- Amendments to IFRS 7, IFRS 9 and IAS 39 - Interest Rate Benchmark Reform;
-- Amendments to IAS 1 and IAS 8 - Definition of Material; and
-- Amendments to IFRS 16 - COVID-19 Related Rent Concessions.
The adoption of these amendments did not have any impact on the
current period or any prior period and is not likely to affect
future periods. Certain new accounting standards and
interpretations have been published that are not mandatory for the
31 May 2021 reporting period and have not been early adopted by the
Group. The Group will undertake an assessment of the impact of
these new standards and interpretations in due course.
Restatement due to prior year adjustments
As documented in the 2020 annual financial statements, during
the year ended 31 May 2020, management identified a number of
errors relating to prior periods. Accordingly, prior year
adjustments were made, details of which can be found in note 1 of
the 2020 Annual Report and Accounts Financial Statements.
The impacts of these prior year adjustments have been reflected
and results restated for the period ended 30 November 2019.
See tables below for details:
Consolidated Income Statement
30 November 2019
GBPm
-----------------------------------------
As previously Adjustment As restated
reported
--------------
Share of results of joint ventures 1.8 (0.1) 1.7
Cost of Sales (FX) (186.9) 0.1 (186.8)
Operating Profit 37.0 - 37.0
Profit before tax 34.7 - 34.7
Profit attributable to owners
of the parent 29.7 - 29.7
Consolidated Statement of Other
Comprehensive Income
30 November 2019
GBPm
-----------------------------------------
As previously Adjustment As restated
reported
--------------
Exchange differences on translation
of foreign operations (8.5) (0.7) (9.2)
Other comprehensive income for
the year net of taxation (18.4) (0.7) (19.1)
Total comprehensive income for
the year 10.4 (0.7) 9.7
Consolidated Balance Sheet
30 November 2019
GBPm
-----------------------------------------
As previously Adjustment As restated
reported
--------------
Net investments in joint ventures 37.5 0.6 38.1
Cash and cash equivalents 41.5 (1.6) 39.9
Currency translation reserve (103.8) 1.5 (102.3)
Retained Earnings 548.5 (3.5) 545.0
Equity attributable to owners
of parent 410.8 (2.0) 408.8
Non-controlling interests 26.3 1.0 27.3
Consolidated Statement of Changes
in Equity
30 November 2019
GBPm
As previously Adjustment As restated
reported
--------------
Currency translation reserve
At 1 June 2019 (86.7) 2.2 (84.5)
Exchange differences on translation
of foreign operations (8.5) (0.7) (9.2)
At 30 November 2019 (103.8) 1.5 (102.3)
Retained earnings
At 1 June 2019 542.3 (3.5) 538.8
At 30 November 2019 548.5 (3.5) 545.0
Non-Controlling interests
At 1 June 2019 28.2 1.0 29.2
At 30 November 2019 26.3 1.0 27.3
3. Segmental analysis
The Chief Operating Decision Maker (CODM) has been identified as
the Executive Board which comprises the Chief Executive Officer and
the Chief Financial Officer. The CODM reviews the Group's internal
reporting in order to assess performance and allocate resources.
The CODM has determined the operating segments based on these
reports which include an allocation of central revenue and costs as
appropriate. For reporting purposes, in accordance with IFRS 8
'Operating segments', the Board aggregates operating segments with
similar economic characteristics and conditions into reporting
segments, which form the basis of the reporting in the condensed
consolidated interim financial statements.
The CODM considers the business from a geographic perspective,
with Europe & the Americas, Asia Pacific, Africa and Central
being the operating segments. The CODM assesses the performance
based on operating profit before any exceptional items. Other
information provided, except as noted below, to the CODM is
measured in a manner consistent with that of the Financial
Statements.
Revenues and operating profit of the Europe & the Americas
and Asia Pacific segments arise from the sale of Personal Care,
Home Care and Food & Nutrition products. Revenue and operating
profit from the Africa segment arise from the sale of Personal
Care, Home Care, Food & Nutrition and Electrical products. The
Central segment refers to the activities in terms of revenue of our
in-house fragrance house and in terms of cost the expenditure
associated with the Global HQ and above market functions net of
recharges to our regions. Sales between segments are carried out on
an arm's length basis.
The basis of segmentation has been changed since previous
reporting periods, separating out the Central segment which was
previously reported within Europe & the Americas. This change
has been made as it better reflects the way the business is
managed.
Business segments
Half year to 30 November Europe & Asia Africa Central Eliminations Total
2020 the Americas Pacific GBPm GBPm GBPm GBPm
GBPm GBPm
-------------- --------- ------- -------- -------------
Gross segment revenue 119.2 100.1 94.9 30.2 (31.5) 312.9
Inter segment revenue (2.1) (4.2) - (25.2) 31.5 -
---------------------------- -------------- --------- ------- -------- ------------- ------
Revenue 117.1 95.9 94.9 5.0 - 312.9
---------------------------- -------------- --------- ------- -------- ------------- ------
Segmental operating profit
before exceptional items
and share of results of
joint ventures 27.3 11.7 - (4.9) - 34.1
Share of results of joint
ventures - - 2.3 - - 2.3
---------------------------- -------------- --------- ------- -------- ------------- ------
Segmental operating profit
before exceptional items 27.3 11.7 2.3 (4.9) - 36.4
---------------------------- -------------- --------- ------- -------- ------------- ------
Exceptional Items (0.1) (0.6) 2.4 (0.3) - 1.4
---------------------------- -------------- --------- ------- -------- ------------- ------
Segmental operating profit 27.2 11.1 4.7 (5.2) - 37.8
---------------------------- -------------- --------- ------- -------- ------------- ------
Finance income 0.5
Finance cost (2.0)
---------------------------- -------------- --------- ------- -------- ------------- ------
Profit before taxation 36.3
---------------------------- -------------- --------- ------- -------- ------------- ------
Half year to 30 November Europe Asia Africa Central Eliminations Total
2019 & the Americas
(restated)* GBPm Pacific GBPm GBPm GBPm GBPm
GBPm
---------------- --------- ------- -------- -------------
Gross segment revenue 90.5 98.7 98.2 57.7 (61.1) 284.0
Inter segment revenue (2.1) (4.5) - (54.5) 61.1 -
---------------------------- ---------------- --------- ------- -------- ------------- ------
Revenue 88.4 94.2 98.2 3.2 - 284.0
---------------------------- ---------------- --------- ------- -------- ------------- ------
Segmental operating profit
before exceptional items
and share of results of
joint ventures 20.5 8.2 - 1.8 - 30.5
Share of results of joint
ventures - - 1.7 - - 1.7
---------------------------- ---------------- --------- ------- -------- ------------- ------
Segmental operating profit
before exceptional items 20.5 8.2 1.7 1.8 - 32.2
---------------------------- ---------------- --------- ------- -------- ------------- ------
Exceptional Items (2.2) (0.2) - 9.2 - 6.8
---------------------------- ---------------- --------- ------- -------- ------------- ------
Segmental operating profit 18.3 8.0 1.7 11.0 - 39.0
---------------------------- ---------------- --------- ------- -------- ------------- ------
Finance income 0.5
Finance cost (2.7)
---------------------------- ---------------- --------- ------- -------- ------------- ------
Profit before taxation 36.8
---------------------------- ---------------- --------- ------- -------- ------------- ------
*See note 2 for details of restatement
Year to 31 May 2020 Europe & Asia Africa Central Eliminations Total
the Americas Pacific GBPm GBPm GBPm GBPm
GBPm GBPm
-------------- --------- ------- -------- -------------
Gross segment revenue 211.6 194.7 187.5 105.9 (112.5) 587.2
Inter segment revenue (3.6) (9.5) - (99.4) 112.5 -
---------------------------- -------------- --------- ------- -------- ------------- -------
Revenue 208.0 185.2 187.5 6.5 - 587.2
---------------------------- -------------- --------- ------- -------- ------------- -------
Segmental operating profit
before exceptional items
and share of results of
joint ventures 54.3 18.5 (10.2) 0.7 - 63.3
Share of results of joint
ventures - - 2.8 - - 2.8
---------------------------- -------------- --------- ------- -------- ------------- -------
Segmental operating profit
before exceptional items 54.3 18.5 (7.4) 0.7 - 66.1
---------------------------- -------------- --------- ------- -------- ------------- -------
Exceptional Items (5.0) (38.0) (0.9) 11.2 - (32.7)
---------------------------- -------------- --------- ------- -------- ------------- -------
Segmental operating profit 49.3 (19.5) (8.3) 11.9 - 33.4
---------------------------- -------------- --------- ------- -------- ------------- -------
Finance income 0.9
Finance cost (5.0)
---------------------------- -------------- --------- ------- -------- ------------- -------
Profit before taxation 29.3
---------------------------- -------------- --------- ------- -------- ------------- -------
The Group analyses its net revenue by the following
categories:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
------------------ ------------- ------------- --------
Personal Care 205.5 179.7 380.0
Home Care 43.6 42.6 86.0
Food & Nutrition 19.5 19.4 37.2
Electricals 38.5 38.3 76.2
Other 5.8 4.0 7.8
------------------ ------------- ------------- --------
312.9 284.0 587.2
------------------ ------------- ------------- --------
4. Exceptional items
Half year to 30 November 2020
Exceptional Exceptional
items before items after
Exceptional items included within operating taxation Taxation taxation
profit: GBPm GBPm GBPm
---------------------------------------------- ------------- -------- ------------
Profit on the sale of land - Nigeria (3.9) 0.4 (3.5)
Group strategy project 2.5 (0.4) 2.1
---------------------------------------------- ------------- -------- ------------
Exceptional items - continuing operations (1.4) - (1.4)
Loss on disposal of the sale of Nutricima
- discontinued operations 12.8 (1.7) 11.1
11.4 (1.7) 9.7
---------------------------------------------- ------------- -------- ------------
The Group incurred net exceptional expenditure before tax of
GBP11.4 million as follows:
- Costs of GBP12.8m in relation to the loss on disposal of the
assets of the Nutricima business. Sales proceeds were in line with
the net book value of the assets, with the loss arising as a result
of recycling of the currency reserve associated with these assets
to the income statement (see note 16 for further details).
- A profit of GBP3.9m on the sale of land by PZ Cussons Nigeria
in connection with the Nutricima sale. PZ Cussons Nigeria is not
part of the disposal group and thus this amount has been included
as part of continuing operations.
- Costs of GBP2.5 million relating to the Group Strategy Project
to realign the organisation design to create a more effective
operating model in line with our strategy to support the
organisation. These costs largely reflect the expansion of this
project to include the simplification of our Nigerian operations,
which will continue through the second half of this financial
year.
Half year to 30 November 2019
The Group generated net exceptional income before tax of GBP6.7
million as follows:
- Income of GBP8.3 million relating to the disposal of the Group's Greece business
- Costs of GBP1.1 million relating to the Group Strategy Project
regarding the disposal of non-core brands and activities in line
with our 'Focus, Scale, Accelerate' strategy launched in July 2019.
The majority of the costs in this period were professional fees
incurred on planned disposals; and
- Costs of GBP0.5 million relating to the Group structure and
systems project to realign the organisation design to create a more
effective operating model. These costs included initiatives to
improve our operating efficiency across Head Office and all three
Regions. The project was complete as at 31 May 2020.
Year to 31 May 2020
The Group incurred net exceptional expenditure before tax of
GBP34.4 million (GBP32.7m from continuing operations, GBP1.7m from
discontinued) as follows:
- Group structure and systems project costs (cost of GBP4.9 million);
- Group Strategy project costs (cost of GBP5.9 million);
- Profit on sale of Greece business (income of GBP7.9 million);
- Profit on sale of Luksja brand (income of GBP5.1 million); and
- Impairment of Australian assets (cost of GBP36.6 million).
5. Net finance costs
Continuing Operations Unaudited Unaudited Audited
Half year Half year Year to
to to 31 May
30 November 30 November 2020
2020 2019
GBPm GBPm GBPm
-------------------------------------- ------------- ------------- --------
Interest receivable on cash deposits 0.3 0.5 0.9
Investment income 0.2 - -
Interest income 0.5 0.5 0.9
Interest payable on bank loans and
overdrafts (0.8) (1.9) (3.6)
Interest payable to external third
parties (0.2) (0.2) (0.3)
Interest expense on the IFRS 16
lease liabilities (0.7) (0.2) (0.5)
Finance costs incurred on revolving
credit facility renewal (0.3) (0.4) (0.6)
-------------------------------------- ------------- ------------- --------
Net finance costs (1.5) (2.2) (4.1)
-------------------------------------- ------------- ------------- --------
Discontinued Operations Unaudited Unaudited Audited
Half year Half year Year to
to to 31 May
30 November 30 November 2020
2020 2019
GBPm GBPm GBPm
Interest income - - -
Interest payable - (0.1) (0.1)
------------------------- -------------- ------------- --------
Net finance costs - (0.1) (0.1)
------------------------- -------------- ------------- --------
6. Property, plant and equipment and intangible assets
Goodwill, software Property,
and other plant and
intangible assets equipment
GBPm GBPm
Opening net book amount as at 1 June
2019 369.2 148.8
Additions 0.7 2.1
Disposals in relation to disposed
entity (10.2) (15.3)
Impairment of software in relation
to disposed entity (3.1) -
Transfers between asset classification 1.2 (1.2)
Depreciation - (8.0)
Amortisation (3.2) -
Currency retranslation (3.7) (2.3)
------------------------------------------- ------------------- -----------
Closing net book amount as at 30 November
2019 350.9 124.1
------------------------------------------- ------------------- -----------
Opening net book amount as at 1 June
2020 304.4 106.9
Additions 0.7 1.7
Acquisition of non-controlling interest 0.9 -
Depreciation - (6.0)
Amortisation (3.1) -
Impairment - (0.2)
Currency retranslation 0.6 (5.3)
------------------------------------------- ------ ------
Closing net book amount as at 30 November
2020 303.5 97.1
------------------------------------------- ------ ------
Goodwill, software and other intangible assets comprise goodwill
of GBP43.6 million (30 November 2019: GBP45.2 million), software of
GBP32.6million (30 November 2019: GBP40.0 million), the majority of
which relates to the implementation and associated costs of the SAP
project and other intangible assets of GBP227.3 million (30
November 2019: GBP265.7 million) relating to the Group's acquired
brands.
Goodwill and other intangible assets (which include the Group's
acquired brands), have all arisen from previous business
combinations and all have indefinite useful lives and, in
accordance with IAS36, are subject to annual impairment testing, or
more frequent testing if there are indicators of impairment. The
method used is as follows:
-- Intangible assets (including goodwill) are allocated to
appropriate cash-generating units (CGUs) based on the smallest
identifiable group of assets that generate cash inflows
independently in relation to the specific intangible/goodwill.
-- The recoverable amounts of the CGUs are estimated as the
higher of an asset's fair value less costs of disposal and its
value in use. Value in use is determined through calculations that
use cash flow projections from approved budgets and plans over a
period of five years which are then extrapolated beyond the five
year period based on estimated long-term growth rates.
As at 30 November 2020, management did not identify any
impairment triggers. As a result, no impairment review has been
performed.
Capital commitments
At 30 November 2020, the Group had entered into commitments for
the acquisition of property, plant and equipment amounting to
GBP2.3m (30 November 2019: GBP5.1 million). At 30 November 2020,
the Group's share in the capital commitments of joint ventures was
GBPnil (30 November 2019: GBPnil).
7. Tax
Continuing Operations
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
---------------- ------------- ------------- --------
United Kingdom 7.7 3.2 5.4
Overseas 0.2 2.9 4.3
---------------- ------------- ------------- --------
7.9 6.1 9.7
---------------- ------------- ------------- --------
Income tax income on discontinued operations is GBP1.7m for half
year to 30 November 2020 (30 November 2019: GBPnil, 31 May 2020:
GBP0.4m income).
Income tax expense is recognised based on management's best
estimate of the annual tax rate expected for the full financial
year. The estimated average annual tax rate to be used for the year
ending 31 May 2021, before exceptional items, is 24.6% (the tax
rate for the half year ended 30 November 2019 was 24.1%) and the
effective tax rate to be used, post-exceptional items, is 30.0% (30
November 2019: 17.5%).
8. Dividends
An interim dividend of 2.67p per share for the half year to 30
November 2020 (2019: 2.67p) has been declared totalling GBP11.2
million (2019: GBP11.2 million) and is payable on 1 April 2021 to
shareholders on the register at the close of business on 12
February 2021. This interim dividend has not been recognised in
this half yearly report as it was declared after the end of the
reporting period. The proposed final dividend for the year ended 31
May 2020 of 3.13p per share, totalling GBP13.1 million, was
approved by shareholders at the Annual General Meeting of the
Company and paid on 3 December 2020.
9. Earnings per share
Basic earnings per share and diluted earnings per share are
calculated by dividing profit for the period attributable to owners
of the Parent by the following weighted average number of shares in
issue:
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 November 30 November 31 May
2020 2019 2020
Basic weighted average (000) 418,365 418,354 418,353
Diluted weighted average (000) 418,365 418,355 418,353
-------------------------------- ------------- ------------- ---------
The difference between the average number of Ordinary Shares and
the basic weighted average number of Ordinary Shares represents the
shares held by the Employee Share Option Trust, whilst the
difference between the basic and diluted weighted average number of
shares represents the dilutive effect of the Deferred Annual Share
Bonus Scheme, Executive Share Option Schemes and the Performance
Share Plan (together the 'share incentive plans'). The average
number of shares is reconciled to the basic and diluted weighted
average number of shares below:
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 November 30 November 31 May
2020 2019 2020
Average number of Ordinary Shares
in issue during the
period (000) 428,725 428,725 428,725
Less weighted average number of
Ordinary Shares held by the Employee
Share Option Trust (000) (10,360) (10,371) (10,372)
--------------------------------------- ------------- ------------- ---------
Basic weighted average number of
Ordinary Shares in issue during
the period (000) 418,365 418,354 418,353
Dilutive effect of share incentive
plans (000) - 1 -
Diluted weighted average number
of Ordinary Shares in issue during
the period (000) 418,365 418,355 418,353
--------------------------------------- ------------- ------------- ---------
Adjusted basic and diluted earnings per share are stated as
follows:
From continuing operations:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
Basic earnings per share:
* Adjusted basic earnings per share 6.67p 5.76p 12.17p
* Exceptional items 0.14p 1.79p (6.57p)
-------------------------------------------- ------------- ------------- --------
Basic earnings per share 6.81p 7.55p 5.59p
-------------------------------------------- ------------- ------------- --------
Diluted earnings per share:
* Adjusted diluted earnings per share 6.67p 5.76p 12.17p
* Exceptional items 0.14p 1.79p (6.57p)
-------------------------------------------- ------------- ------------- --------
Diluted earnings per share 6.81p 7.55p 5.59p
-------------------------------------------- ------------- ------------- --------
From continuing and discontinued operations:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
Basic earnings per share:
* Adjusted basic earnings per share 5.93p 5.33p 11.59p
* Exceptional items (2.51p) 1.77p (6.98p)
-------------------------------------------- ------------- ------------- --------
Basic earnings per share 3.42p 7.10p 4.61p
-------------------------------------------- ------------- ------------- --------
Diluted earnings per share:
* Adjusted diluted earnings per share 5.93p 5.33p 11.59p
* Exceptional items (2.51p) 1.77p (6.98p)
-------------------------------------------- ------------- ------------- --------
Diluted earnings per share 3.42p 7.10p 4.61p
-------------------------------------------- ------------- ------------- --------
The adjusted profit for the period has been calculated as
follows:
From continuing operations:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
Profit attributable to owners of
the Parent 28.5 31.6 23.4
Exceptional items (net of taxation
effect) (0.6) (7.5) 27.5
------------------------------------ ------------- ------------- --------
Adjusted profit after tax 27.9 24.1 50.9
------------------------------------ ------------- ------------- --------
From continuing and discontinued operations:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
Profit attributable to owners of
the Parent 14.3 29.7 19.3
Exceptional items (net of taxation
effect) 10.5 (7.4) 29.2
------------------------------------ ------------- ------------- --------
Adjusted profit after tax 24.8 22.3 48.5
------------------------------------ ------------- ------------- --------
10. Reconciliation of profit before tax to cash generated from operations
(Restated)*
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- --------
Profit before tax 20.4 34.9 24.8
Adjustment for net finance costs
(note 5) 1.5 2.3 4.2
--------------------------------------- ------------- ------------- --------
Operating profit 21.9 37.2 29.0
Depreciation (note 6 & 15) 8.0 9.2 18.7
Amortisation (note 6) 3.1 3.2 6.8
Impairment loss on intangible assets - 3.1 42.9
Impairment loss on tangible assets 0.2 - -
Loss on sale of assets 8.0 0.1 0.1
Profit on disposal of companies &
businesses - (13.1) (13.0)
Difference between pension charge
and cash contributions - (3.1) (3.9)
Share based payment charges 0.9 - -
Share of results from joint ventures (2.3) (1.7) (1.2)
Operating cash flows before movements
in working capital 39.8 34.9 79.4
Movements in working capital:
Inventories 10.8 (1.2) 10.8
Trade and other receivables (10.0) 4.0 39.1
Trade and other payables (5.3) (13.1) 8.7
Provisions 0.1 (0.2) (0.3)
--------------------------------------- ------------- ------------- --------
Cash generated from operations 35.4 24.4 137.7
--------------------------------------- ------------- ------------- --------
*See note 2 for details of restatement
11. Net debt reconciliation
Group net debt, comprises the following:
Audited Unaudited Unaudited Unaudited
Foreign
1 June exchange 30 November
2020 Cash flow movements 2020
GBPm GBPm GBPm GBPm
--------------------------- -------- ---------- ----------- ------------
Cash at bank and
in hand 77.8 11.2 (2.3) 86.7
Short term deposits 0.9 1.9 - 2.8
Overdrafts (1.2) 1.2 - -
Cash and cash equivalents 77.5 14.3 (2.3) 89.5
Current asset investments 0.3 - - 0.3
Loans due within - - - -
one year
Loans due over one
year (127.0) 19.0 - (108.0)
Net debt (49.2) 33.3 (2.3) (18.2)
---------------------------- -------- ---------- ----------- ------------
Loans due over one year include the Group's main borrowing
facility which was renewed during the year ended 31 May 2019. This
is provided by a syndicate of lenders in the form of a GBP325
million Revolving Credit Facility committed until 28 November 2023.
The Group also has access to uncommitted working capital facilities
amounting to GBP135.3 million.
Overdrafts do not form part of the Group's main borrowing
facility and only arise as part of the Group's composite banking
arrangements with key banking partners. Under the terms of this
arrangement, cash and overdraft balances recognised by the
Overdraft's Obligor Group are considered as one cash pool with the
net position being monitored by the Directors and Lenders.
Any IFRS16 liabilities have been excluded from the Net Debt
number to support comparison with the prior period.
12. Retirement benefits
The Group operates retirement benefit schemes for its UK and
certain overseas subsidiaries. These obligations have been measured
in accordance with IAS 19 'Employee Benefits (revised)' and are as
follows:
Unaudited Unaudited Audited
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
---------------------------------- ------------ ------------ --------
UK schemes in surplus 98.2 93.6 104.3
UK schemes in deficit (4.6) (4.5) (4.5)
Restriction due to asset ceiling (57.8) (55.3) (61.4)
---------------------------------- ------------ ------------ --------
Net UK position 35.8 33.8 38.4
Overseas schemes (7.6) (7.0) (7.7)
---------------------------------- ------------ ------------ --------
28.2 26.8 30.7
---------------------------------- ------------ ------------ --------
The Group has four main defined benefit schemes which are based
and administered in the UK and are closed to future accrual and new
entrants.
The key financial assumptions (applicable to all UK schemes)
applied in the actuarial review of the pension schemes have been
reviewed in the preparation of these interim condensed consolidated
financial statements and amended where appropriate from those
applied at 31 May 2020. The key assumptions made were:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
% per annum % per annum % per annum
----------------------------------------- ------------- ------------- ------------
Rate of increase in retirement benefits
in payment 2.80% 2.80% 2.70%
Discount rate 1.55% 2.00% 1.65%
Inflation assumption 2.95% 2.85% 2.75%
----------------------------------------- ------------- ------------- ------------
The movement during the period in the UK schemes is broken down
as follows:
Unaudited Unaudited
30 November 30 November
2020 2019
GBPm GBPm
----------------------------------------------- ------------ ------------
Retirement benefit surplus as at 1 June 38.4 31.8
Net pension interest income 0.3 0.4
Past service cost (0.2) -
Administration expenses paid by the schemes (0.2) (0.2)
Contributions paid - 3.0
Employer direct benefit payments 0.1 0.1
Remeasurement (loss)/gain due to changes
in financial assumptions (10.5) (7.7)
Gain/(loss) on scheme assets (excluding
interest income) 3.8 5.1
Changes in asset ceiling (including interest) 4.1 1.3
------------------------------------------------- ------------ ------------
Retirement benefit surplus as at 30 November 35.8 33.8
------------------------------------------------- ------------ ------------
13. Financial risk management and financial instruments
The Group's operations expose it to a variety of financial risks
including foreign currency risk, credit risk, liquidity risk and
interest rate risk. The Group's treasury policy addresses issues of
liquidity, funding and investment as well as currency, credit,
liquidity and interest rate risks.
The condensed consolidated interim financial statements do not
include all the financial risk management information and
disclosures required in the annual financial statements. This
information and related disclosures are presented in the Group's
annual financial statements as at 31 May 2020. There have been no
significant changes to risk management policies or processes since
the year end.
i) Fair value estimation
The Group holds a number of financial instruments that are held
at fair value within the condensed consolidated interim financial
statements. In deriving the fair value, the derivative financial
instruments are classified as level 1, level 2 or level 3 dependent
on the valuation method applied in determining their fair
value.
The different levels are defined as follows:
Level
----- ------------------------------------------------------------
1 Quoted prices (unadjusted) in active markets for identical
assets or liabilities.
2 Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly
(prices) or indirectly (derived from prices).
3 Inputs for the assets and liabilities that are not based
on observable market data (unobservable inputs).
----- ------------------------------------------------------------
The financial instruments held at fair value by the Group relate
to foreign currency forward contracts used as derivatives for
hedging. For both the six months ended 30 November 2020 and 30
November 2019 and the year ended 31 May 2020 the assets and
liabilities arising from foreign currency forward contracts have
been classified as level 2. The fair value of these instruments at
each of the period ends was:
Unaudited Unaudited Audited
Half year Half year
to to Year to
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
------------------------------------ ------------- ------------- --------
Assets
Foreign currency forward contracts 0.8 1.3 0.7
------------------------------------ ------------- ------------- --------
Liabilities
Foreign currency forward contracts 1.2 0.7 0.9
------------------------------------ ------------- ------------- --------
There have been no transfers between level 1 and 2 in any
period.
The fair value of the following financial assets and liabilities
approximates to their carrying amount:
-- Trade receivables and other receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Borrowings
ii) Fair value measurement
Level 2 trading and hedging derivatives comprise forward foreign
currency exchange contracts. The fair value of forward foreign
currency exchange contracts is determined using forward currency
exchange rates quoted in an active market at the Balance Sheet
date. The Group has considered but deemed the impact of discounting
level 2 derivatives that mature in the next 12 months as generally
insignificant.
14. Related party transactions
PZ Wilmar Limited and PZ Wilmar Food Limited
The following related party transactions were entered into by
the above subsidiary companies during the year under the terms of a
joint venture agreement with Singapore based Wilmar International
Limited:
- At 30 November 2020 the outstanding loan balance receivable
from PZ Wilmar Limited was GBP37.3 million (30 November 2019:
GBP33.3 million) and from PZ Wilmar Food Limited was GBP7.7 million
(30 November 2019: GBP7.9 million). These receivables relate to
long term loan investments that have been made by both joint
venture partners.
- At 30 November 2020 the outstanding trade receivable balance
from PZ Wilmar Limited was GBP1.2 million (30 November 2019: GBP1.0
million) and from PZ Wilmar Food Limited was GBPnil (2019:
GBPnil).
All trading balances will be settled in cash. There were no
provisions for doubtful related party receivables at 30 November
2020 (30 November 2019: GBPnil) and no charge to the income
statement in respect of doubtful related party receivables (30
November 2019: GBPnil).
Wilmar PZ International Pte Limited
The following related party transactions were entered into by
the above subsidiary company during the year under the terms of a
joint venture agreement with Singapore based Wilmar International
Limited:
- At 30 November 2020 the outstanding other receivable balance
from Wilmar PZ International Pte Limited was GBPnil (30 November
2019: GBP0.3 million). These receivables relate to services
provided by subsidiary companies to Wilmar PZ International Pte
Limited.
PZ Foundation
The PZ Foundation is not a related party within the definition
of IAS 24 or the UK Listing Rules. Neither PZ Cussons plc nor its
subsidiaries have effective control or day to day management
responsibilities for the PZ foundation and the Group's support is
limited to annual donations to support the foundation's charitable
works. Disclosure is made in this section on a voluntary basis in
the interests of transparency. During the year to 30 November 2020,
contributions from the UK to PZ Foundation were GBPnil (30 November
2019: GBPnil). As at 30 November 2020 there was no outstanding
balances with the PZ Foundation (30 November 2019: GBPnil).
15. IFRS 16 'Leases'
The Group has lease contracts for various items of property,
vehicles and other equipment used in its operations. Leases of
property generally have lease terms between 3 and 12 years, while
motor vehicles and other equipment generally have lease terms
between 1 and 4 years.
The Group also has certain leases of vehicles with lease terms
of 12 months or less and leases of equipment with low-value. The
Group applies the 'short-term lease' and 'lease of low-value
assets' recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Land & buildings Cars Other equipment Total
GBPm GBPm GBPm GBPm
---------------------- ----------------- ------ ---------------- ------
As at 1 June 2020 11.5 2.0 0.2 13.7
Additions - - - -
Depreciation (1.1) (0.5) - (1.6)
Currency translation (0.2) (0.1) - (0.3)
----------------------- ----------------- ------ ---------------- ------
As at 30 Nov 2020 10.2 1.4 0.2 11.8
Set out below are the carrying amounts of lease liabilities and
the movements during the period:
Total
Lease liability GBPm
------------------------ ------
As at 1 June 2020 13.7
Additions -
Accretion of interest 0.7
Payments (2.2)
Currency translation (0.1)
As at 30 Nov 2020 12.1
------------------------ ------
Current liabilities 2.9
Non-current liabilities 9.2
------------------------ ------
Total lease liabilities 12.1
------------------------ ------
The following are the amounts recognised in profit or loss:
Unaudited Unaudited
Half Year Half Year
to 30 November to 30 November
2020 2019
GBPm GBPm
-------------------------------------------- --------------- ---------------
Depreciation expense of right-of-use assets 1.6 1.2
Interest expense on lease liabilities 0.7 0.2
Expense relating to short term or low-value
assets 0.1 0.2
Total amount recognised in profit or loss 2.4 1.6
-------------------------------------------- --------------- ---------------
16. Discontinued operations
On 18th March 2020, the Group exchanged contracts for the sale
of the assets associated with Nutricima Ltd, which carried out the
Group's Food & Nutrition operations in Africa. The sale
completed on 28 September 2020, on which date control of the assets
passed to the acquirer.
In the prior period, on 28 August 2019, the Group entered into a
sale agreement to dispose of Minerva S.A., which carried out the
Group's food and nutrition operations in Greece as part of the
Europe and the Americas regional segment. The disposal was
completed on 30 September 2019, on which date control of Minerva
S.A. passed to the acquirer.
Additionally in the prior period, on 12 August 2019, the Group
entered into an agreement for the sale of the Polish Personal Care
brand Luksja. The sale agreement included the sale of the inventory
holding of PZ Polska SA. This disposal was completed on 28th
February 2020, on which date rights to the Luksja brand passed to
the acquirer.
All three of the above areas of the business have been
classified as discontinued in these financial statements.
The results of the discontinued operations, which have been
included in the consolidated income statement, were as follows:
Unaudited Unaudited Audited
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
Revenue 2.5 31.4 45.5
Expenses (5.6) (33.2) (50.0)
------------ ------------ --------
Loss before tax (3.1) (1.8) (4.5)
Attributable tax income - - 0.4
------------ ------------ --------
(3.1) (1.8) (4.1)
(Loss)/profit on disposal of discontinued
operations (12.8) 8.3 13.1
Attributable tax income/(expense) 1.7 - (1.4)
------------ ------------ --------
Net (loss)/profit attributable to
discontinued operations
(attributable to owners of the
Company) (14.2) 6.5 7.6
------------ ------------ --------
The above results include net exceptional items of GBP11.1
million which are described in note 4.
The results of the discontinued operations, which have been
included in the consolidated cash flow statement, were as
follows:
Unaudited Unaudited Audited
30 November 30 November 31 May
2020 2019 2020
GBPm GBPm GBPm
Net cash generated from operating
activities (3.8) (2.0) 7.2
Net cash used in investing activities 11.6 0.6 1.0
Net cash used in financing activities - - -
------------ ------------ --------
Net increase in cash and cash equivalents 7.8 (1.4) 8.2
------------ ------------ --------
17. Seasonality
Certain business units have a degree of seasonality with the
biggest factors being the weather and Christmas. However, no
individual reporting segment is seasonal as a whole and therefore
no further analysis is provided.
18. Principal risks and uncertainties
PZ Cussons has over 130 years of trading history with a long
standing tradition of sustainable growth in our key regions of
Europe, Africa and Asia. Our in-depth local understanding, strong
brand position and robust infrastructure within these markets,
allied to a strong Group balance sheet, enable us to withstand
short to medium-term political and financial instabilities that may
adversely impact the Group.
The Group's risk management framework is explained on page 52 of
our 2020 Strategic Report which is available on our website at
www.pzcussons.com . The Board assumes overall accountability for
the management of risk whilst the Audit & Risk Committee
continues to monitor and review the effectiveness of the Group's
risk management and internal control systems. The Executive
Leadership Team ensures that the risk management framework is
embedded and operates throughout the Group and regularly reviews
both the regional and consolidated risk registers, verifying
appropriate mitigation activities are operating effectively.
The identified principal risks are considered largely unchanged
from those outlined on pages 56 to 58 of our 2020 Strategic Report.
These are: pandemic, consumer, customer and economic trends, IT and
information security, sustainability and environment, legal and
regulatory compliance, talent retention and development, business
transformation, consumer safety, supply chain and logistics and
treasury and tax.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and that the interim
management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The Directors of PZ Cussons Plc are listed on page 30. A list of
current Directors is maintained on the PZ Cussons Plc website.
By order of the Board
Mr K Massie
Company Secretary
26 January 2021
INDEPENT REVIEW REPORT TO PZ CUSSONS PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 November 2020 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated balance sheet, the consolidated statement
of changes in equity, the consolidated cash flow statement and
related notes 1 to 18. We have read the other information contained
in the half-yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
November 2020 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Manchester, UK
26 January 2021
Directors
Chair
C Silver *
Chief Executive
J Myers
Chief Financial Officer
S Pollard
J Townsend *
J Nicolson *
D Kucz *
K Bashforth *
* Non-executive
Secretary
K Massie
Registered Office
Manchester Business Park
3500 Aviator Way
Manchester
M22 5TG
Registered number
Company registered number 00019457
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Website
www.pzcussons.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BAMPTMTJTBPB
(END) Dow Jones Newswires
January 26, 2021 02:00 ET (07:00 GMT)
Pz Cussons (LSE:PZC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Pz Cussons (LSE:PZC)
Historical Stock Chart
From Apr 2023 to Apr 2024
