TIDMPZC
RNS Number : 5274M
PZ CUSSONS PLC
22 September 2021
22 September 2021
Revenue growth, improved operating profit and balance sheet
discipline
- growth in adjusted EPS from continuing operations and dividend
increased
PRELIMINARY RESULTS FOR THE YEARED 31 MAY 2021
PZ Cussons plc ("PZ Cussons" or the "Group") today issues its
preliminary results for the
financial year ended 31 May 2021.
Year ended Year ended Reported Constant
Adjusted measures 31 May * % change currency
2021 31 May 2020 % change
(1)
Revenue from continuing operations GBP603.3m GBP587.2m +2.7% +7.1%
Adjusted (2) operating profit from
continuing operations GBP71.0m GBP65.9m +7.7% +7.6%
Adjusted (2) profit before tax
from continuing operations GBP68.6m GBP61.8m +11.0%
Adjusted (2) basic EPS from continuing
operations 13.12p 12.17p +7.8%
Net debt (excluding lease liabilities) GBP(30.7)m GBP(49.2)m
(3)
Statutory measures
Operating profit from continuing
operations GBP65.6m GBP22.4m +193%
Profit before tax from continuing
operations GBP63.2m GBP18.3m +245%
Profit after tax from continuing
operations GBP35.0m GBP8.8m +298%
(Loss)/profit after tax from discontinued
operations GBP(51.6)m GBP10.9m (573)%
(Loss)/profit after tax GBP(16.6)m GBP19.7m (184)%
Basic (loss)/earnings per share
(EPS) (3.97)p 5.62p (171)%
Total dividend per share 6.09p 5.80p +5.0%
Operating & Financial Highlights - in the first year of our
new strategy: Building brands for life. Today and for future
generations
- Organic revenue (1) growth of +7.1%, with all geographic
regions and our core categories of Hygiene, Baby and Beauty all in
growth.
- Must Win Brands revenue (1) grew +11%, with 7 of the 8 brands in growth.
- On a two-year cumulative basis, Must Win Brands revenue (1)
grew +21%. Carex revenue doubled, reflecting the increased size of
the hand hygiene category in the UK and our continued
market-leading position.
- Portfolio Brands revenue (1) grew +3%, driven by growth in
Electricals in Nigeria, partially offset by declines in Imperial
Leather and the now disposed of five:am yoghurt business.
- Gross margin increased +60bps to 39.3%, supported by price /
mix improvements in each of our core categories.
- Marketing investment increased by over +40% versus the prior
year, with all the increase dedicated to Must Win Brands.
- Adjusted operating margin increased +60bps to 11.8%.
- Adjusted profit before tax from continuing operations
GBP68.6m, up +11.0% versus the prior year and ahead of consensus.
(4)
- Adjusted basic earnings per share from continuing operations,
at 13.12p, up +7.8% versus the prior year.
- Continued balance sheet discipline in the fourth quarter, with
closing net debt (excluding lease liabilities) of GBP30.7m, lower
than the GBP49.2m at the prior year end.
- A final dividend of 3.42p, making a total of 6.09p for the
full year. This +5% increase reflects the Board's confidence in the
Group's financial resilience and future growth prospects.
- Adjusting items for FY21 relate primarily to the impact of
disposals, Head office and regional restructuring and our
simplification project in Nigeria.
- The loss after tax of GBP(16.6)m, compared to a profit of
GBP19.7m in the prior year, is due to a loss from discontinued
operations..
- The loss from discontinued operations, of GBP(51.6)m, is
attributable to the pre-tax loss on disposal of Nutricima of
GBP(40.7)m (including the impact of recycling of historical foreign
exchange losses of GBP(39.9)m), associated tax expenses of
GBP(5.2)m, the loss after tax of Nutricima to the date of disposal
of GBP(4.8)m and losses of GBP(0.9)m associated with the disposal
of Luksja which took place in the prior year.
- Basic earnings per share, showing a loss of (3.97)p, reflects
the loss from discontinued operations.
- Profit before tax from continuing operations of GBP63.2m,
compares to a profit of GBP18.3m in the prior year, explained by
the impairments of the Australian brands five:am and Rafferty's
Garden in the prior year.
Jonathan Myers, Chief Executive Officer, commented:
"Today we are reporting full year results for FY21 and providing
a trading update for the first quarter of FY22.
FY21 represents the first year of our new strategy and the
journey to turn around the business. With the return to top and
bottom line growth on an adjusted basis and tangible progress on
key elements of the strategy, we are pleased with the initial
progress made while recognising that we have much more to do. The
revenue momentum was broad-based, with all but one of our Must Win
Brands and all of our regions in growth. We were able to
demonstrate improved levels of profitability and significantly step
up investments in marketing activity and commercial capabilities as
we set out to be a business that builds stronger brands and serves
more consumers. This was set against a backdrop of the Covid-19
pandemic, which saw unprecedented levels of demand for Hygiene
products. Our brands were available for our consumers when they
needed them most and we retained market leadership - both with
Carex in the UK and Morning Fresh in Australia. We were also
pleased with the strong performance of our Baby and Beauty
businesses, as consumer hygiene habits start to normalise.
The momentum gives us confidence that we have the right strategy
for the long-term: Building brands for life. Today and for future
generations. We continue to work hard at executing the strategy:
sustaining marketing investment behind our brands; simplifying the
business; building capabilities; and evolving our culture.
The Board is recommending a final dividend of 3.42p (2020:
3.13p) per share, making a total of 6.09p (2020: 5.80p) per share
for the year. This +5% increase reflects the Board's confidence in
the Group's financial resilience and future growth prospects.
I am grateful to PZ Cussons employees around the world for their
dedication in delivering renewed momentum in the business during a
year of such challenge."
(1) Revenue growth is quoted on a continuing basis and at
constant currency. The definition of constant currency is shown on
page 5.
(2) Adjusting items are detailed in note 2.
(3) Net debt is defined as cash, short-term deposits and current
asset investments, less bank overdrafts and borrowings. It does not
include IFRS 16 lease liabilities (refer to note 7).
(4) Adjusted profit before tax consensus for FY21 was GBP63-65m.
* The results for the year ended 31 May 2020 have been restated.
Further detail is contained within note 10
% change has been omitted where the variance is considered not
meaningful (n/m)
The following performance commentary is presented on a
continuing operations basis. Growth is shown in constant currency
and operating profit is shown and discussed on an adjusted basis
unless otherwise stated.
Business Review
Europe & the Americas
- Strong demand for Hygiene products has been complemented by
strong revenue growth in our Beauty brands through the second half
of the financial year, resulting from increased brand investment,
successful activations and improved distribution.
- Revenue (1) growth of +4.8% was driven by significant growth
in St.Tropez, supported by the successful Ashley Graham influencer
campaign in the US and Sanctuary Spa, which has seen strong
e-commerce performance.
- Carex revenue grew strongly versus the prior year, despite the
comparison with strong demand in Q4 of FY20, with continued demand
for both hand sanitiser and hand wash. Despite increased competitor
activity, Carex remains the UK market leader for both hand
sanitiser and hand wash with a 36% share of the combined
category.
- Revenue from Original Source and Imperial leather declined in
the year, due to softness in the washing & bathing category
since the beginning of the Covid-19 lockdowns and some deliberate
production choices to protect Carex supply.
- Adjusted operating profit, of GBP52.1m, was (3.7)% below the
prior year (at constant currency) with improved profitability in
Beauty partially offsetting a decline in UK Personal Care due to
increased brand investment, fuelling strong Carex revenue growth
and an increase in the brand's spontaneous awareness to 49% (2020:
43%).
- Reported operating profit, of GBP51.0m, was +4.1% ahead of the
prior year (at constant currency) due to adjusting items in the
prior year related to the Group pension recharge.
Asia Pacific
- Revenue (1) growth of +1.7%, across both the key markets of
Indonesia and Australia / New Zealand.
- All Must Win Brands grew, including Cussons Baby in Indonesia
and Morning Fresh in Australia / New Zealand.
- Cussons Baby in Indonesia remains a market leader, due to
maintained brand investment and the relaunch of our baby powder
product range.
- Morning Fresh in Australia increased its market share, was
back on TV with a new advertising campaign after four years and
launched new innovations into adjacent kitchen hygiene
categories.
- Adjusted operating profit, of GBP20.7m, was +15.0% above the
prior year (at constant currency) and ahead of revenue growth due
to a reduction in operating costs driven by head office
restructuring in Indonesia and Australia, plus switching to a
distributor model in New Zealand.
- Reported operating profit, of GBP20.8m, compares with a loss
in the prior year due to the prior year charge of GBP(36.6)m
related to the impairment of the five:am and Rafferty's Garden
brands in Australia.
- Disposal of five:am yoghurt brand announced on 7 May 2021 and completed on 4 June 2021.
Africa
- Revenue (1) growth of +16.2%, with growth across all of Nigeria, Kenya and Ghana.
- All Must Win Brands, namely Morning Fresh, Premier, Joy and
Cussons Baby grew versus the prior year. Morning Fresh and Joy also
increased their market share.
- Revenue growth across most Portfolio Brands with Electricals,
Stella and Canoe in Nigeria all in double-digit growth.
- Adjusted operating profit, of GBP10.7m, compares with a loss
of GBP(7.6)m in the prior year driven by double-digit revenue
growth and improved margin.
- Reported operating profit, of GBP9.0m, compares to a loss of
GBP(2.9)m in the prior year. The adjusting items in the year relate
to our Nigeria simplification project. The adjusting items in the
prior year primarily related to accounting for investment
properties in Ghana.
- Our Palm Oil joint venture, PZ Wilmar, improved its
profitability versus the prior year primarily due to increased
distribution. Devon King's and Mamador are the number 1 and number
3 brands in the cooking oil market, respectively.
- Disposal of Nutricima, our Nigerian milk business, on 28
September 2020, resulting in a loss from discontinued operations of
GBP(50.7)m.
- Additional simplification initiatives completed, with the
closure of our Coolworld retail electrical stores in the first
half, with the review of the product portfolio, route to market,
organisational design, infrastructure and non-core assets
ongoing.
Central
- Adjusted operating loss of GBP(12.5)m compares to a profit of GBP0.7m in the prior year.
- Reported operating loss of GBP(15.2)m, including the GBP2.4m
non-cash impairment of the investment in Wilmar PZ International
Pte Limited, treated as an adjusting item.
- The increased costs include investments in resources and
capabilities to develop, deploy and deliver against our new
strategy. These include investments in Revenue Growth Management
and digital capabilities and the bolstering of the Executive
Leadership Team.
- Additionally, driving the increased cost, is the reinstatement
of the annual bonus for Group employees, not paid in recent years
due to poor business performance historically.
- Central costs also include some global business units that
support local markets, for example our in-house fragrance centre of
excellence Seven Scent and our procurement hub in Singapore.
Notably in FY21, certain restrictions imposed by the Nigerian
government and central bank prevented us fully utilising these
internal services, and as such, they were loss-making.
For further enquiries, please contact
Investors Sarah Pollard, PZ Cussons plc - Chief Financial Officer
0161 435 1000
Media Tim Linacre / Guy Scarborough / Bryn Woodward -
Instinctif
020 7457 2020
Investor and Analyst conference call
PZ Cussons management will host a webcast for analysts and
investors at 9.30am to present the results and provide the
opportunity for Q&A.
The presentation slides to accompany the conference call are
available to download from the website at www.pzcussons.com.
The Annual General Meeting will be held on 23 November 2021.
Subject to approval at the AGM, the final dividend will be paid on
30 November 2021 to shareholders on the register at the close of
business on 22 October 2021.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
relating to expected or anticipated results, performance or events.
Such statements are subject to normal risks associated with the
uncertainties in our business, supply chain and consumer demand
along with risks associated with macro-economic, political and
social factors in the markets in which we operate. Whilst we
believe that the expectations reflected herein are reasonable based
on the information we have as at the date of this announcement,
actual outcomes may vary significantly owing to factors outside the
control of the Group, such as cost of materials or demand for our
products, or within our control such as our investment decisions,
allocation of resources or changes to our plans or strategy. The
Group expressly disclaims any obligation to revise forward-looking
statements made in this or other announcements to reflect changes
in our expectations or circumstances. No reliance may be placed on
the forward-looking statements contained within this
announcement.
Basis of Preparation
The accounting policies applied in our financial statements are
explained in full within our FY20 Annual Report and Financial
Statements. 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 forecasted
funding needs, including those modelled in a downside case.
The discontinued operations presented predominantly reflect
Nutricima Ltd, the assets of which were disposed of on 28 September
2020. The loss from discontinued operations of GBP(51.6)m was
attributable to the pre-tax loss on disposal of Nutricima of
GBP(40.7)m (including the impact of recycling of historical foreign
exchange losses of GBP(39.9)m), associated tax expenses of
GBP(5.2)m, the loss after tax of Nutricima to the date of disposal
of GBP(4.8)m and losses of GBP(0.9)m associated with the disposal
of Luksja which took place in the prior year. Further detail is
available in note 8.
On 4 June 2021, PZ Cussons plc completed the sale of the assets
associated with five:am, which was the Group's yoghurt business in
Australia. On this date, the control of the assets passed to the
acquirer, Barambah Organics. The results of five:am have not been
reported within discontinued operations as the disposal of five:am
does not represent a disposal of a major line of business or an
exit from a geographical area of operation.
In our Financial Statements we use alternative performance
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 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
represents a change from the Group's previous practice of reporting
exceptional items, and will be adopted on a consistent basis for
the purposes of the half year and full year reporting going
forward. Where relevant, comparative IFRS measures have also been
presented.
Adjusted results are presented before adjusting items which in
the financial year, on a pre-tax basis, include GBP(40.7)m of costs
related to the disposal of Nutricima, GBP(3.8)m of costs related to
Nigeria simplification, GBP(2.8)m of costs related to Group and
regional restructuring, a net GBP1.2m impact of classification of
five:am assets as held for sale and GBP(0.4)m costs related to the
disposal of the Luksja brand in Poland. Further detail is available
in note 2.
The adjusted and reported results for the financial year are
presented with variances to the prior year 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 2020 results using 2021 average foreign currency
exchange rates. The translational impact was a GBP(24.1) million
loss on revenue, a GBP0.1 million gain on adjusted operating profit
before tax and a GBP(2.0)m loss on reported operating profit before
tax.
As a business we continue to make decisions on a geographic
basis, and the information reviewed by the Chief Operating Decision
Maker is based on a geographic segmentation of the business.
Therefore, the financial performance discussed below is focused on
the performance of the key regions. Further detail on the segmental
performance is detailed in note 1 to the Financial Statements.
FRC review of 2020 Annual Report and Accounts and 2021 Interim
Financial Information
On 22 April 2021 the Company received a letter from the
Financial Reporting Council ('FRC') following a review of the
Company's FY20 Annual Report and Accounts. The review conducted by
the FRC was part of its ongoing cyclical review of FTSE listed
companies. The review conducted by the FRC was based solely on the
Group's published FY20 Annual Report and Accounts and does not
provide any assurance that the Annual Report and Accounts are
correct in all material respects. The FRC letter noted a number of
questions and observations relating to the Company's accounts. The
Company responded to the FRC letter undertaking to restate or
correct certain disclosures made in the Company's FY20 Annual
Report and Accounts and also to make certain changes to the
Company's accounting policies for subsequent years in order to
further improve and clarify our financial reporting. The FRC
advised the company that its review had been satisfactorily closed
on 13 September 2021. Further detail of the FRC's review is
provided in note 10 and the Company's full response will be
provided within our FY21 Annual Report and Financial Statements in
due course.
Financial Review
On an IFRS basis, the loss after tax of GBP(16.6)m (2020: profit
after tax of GBP19.7m) was driven by the GBP(51.6)m loss from
discontinued operations which was attributable to the pre-tax loss
on disposal of Nutricima of GBP(40.7)m (including the impact of
recycling of historical foreign exchange losses of GBP(39.9)m),
associated tax expenses of GBP(5.2)m, the loss after tax of
Nutricima to the date of disposal of GBP(4.8)m and losses of
GBP(0.9)m associated with the disposal of Luksja which took place
in the prior year. Further detail is available in note 8... The
basic loss per share of (3.97)p (2020: earnings of 5.62p) is due to
this loss after tax.
Adjusted profit before tax from continuing operations, of
GBP68.6m, was up +11.0% versus the prior year, driven by
broad-based revenue growth and improved operating margin. Reported
profit before tax from continuing operations, of GBP63.2m, up +245%
versus the prior year is further explained by the impairments of
the Australian brands five:am and Rafferty's Garden in FY20.
Revenue, at GBP603.3m, grew +2.7% with all regions and our core
categories of Hygiene, Baby and Beauty all in growth. On a constant
currency basis, revenue growth was 7.1%. Gross margin increased
+60bps to 39.3%, supported by positive price / mix in each of our
core categories. Additionally, marketing investment increased by
over +40% on the prior year, with all the increase dedicated to
Must Win Brands.
In Europe & the Americas, adjusted operating profit of
GBP52.1m was (3.5)% lower than prior year (at constant currency).
Profit growth in the Beauty business partially offset a decline in
profit in the UK personal care business due to increased brand
investment, predominantly behind Carex fuelling strong growth and
an increase in spontaneous awareness to 49%, from 43% in the
previous year. Beauty revenue benefitted from significant growth in
St.Tropez, supported by the successful Ashley Graham influencer
campaign in the US with further strong growth in Sanctuary Spa.
In Asia Pacific, adjusted operating profit of GBP20.7m was
+15.0% higher than prior year at constant currency. This was
stronger than revenue growth due to a reduction in operating costs
driven by regional head office restructuring within Indonesia and
Australia and switching to a distributor model in New Zealand.
Revenue growth of +1.7% with both key markets of Indonesia and
Australia / New Zealand in growth. Both markets saw brand
investment benefit our key brands with market share gains seen in
Cussons Baby in Indonesia and Morning Fresh in Australia.
Africa adjusted operating profit of GBP10.7m compares to a loss
of GBP(7.6)m in the prior year. The improved profitability was due
to strong revenue growth, improved adjusted operating profit
margins and increased profit from our joint venture, Wilmar, due to
increased distribution. Revenue growth (at constant currency) of
+16.2% with growth across each of Nigeria, Kenya and Ghana.
Additionally, all Must Win Brands in Africa were in growth versus
prior year and each increased their market share.
Net finance costs of GBP(2.4)m (2020: GBP(4.1)m) reduced
compared to the prior year, reflecting higher interest received on
cash balances and lower interest paid on borrowings due to a
reduction in the drawdown on our revolving credit facility. The
balance drawn down at year end was GBP118m compared to GBP127m in
the prior year.
Adjusted profit before tax of GBP68.6m (2020: GBP61.8m) reflects
the growth in revenue and improved operating margin and the reduced
finance costs compared to the prior year. The effective tax rate on
adjusted profit was 21.0% (2020: 23.5%). The reduction in tax rate
compared to last year is due to the release of tax provisions
related to tax estimates for items in the UK and Nigeria.
Adjusted basic earnings per share from continuing operations was
13.12p (2020: 12.17p), up +7.8% versus the prior year.
In the year the Group incurred adjusting items which on a
post-tax basis amounted to a charge of GBP(65.5)m. These are
detailed further in note 2. The most significant items were related
to the loss on disposal of Nutricima of GBP(45.9)m, which has been
included in discontinued operations, and the deferred tax impact of
the UK tax rate change of GBP(14.2)m, costs relating to our Nigeria
simplication project of GBP(3.6)m, and costs of Group and regional
restructuring of GBP(2.3)m, all of which have been included in
continuing operations.
The balance sheet remains strong, with net debt, (defined as
cash, short-term deposits and current asset investments, less bank
overdrafts and borrowings and excluding lease liabilities) at
GBP30.7m (2020: GBP49.2m). The reduction was due to proceeds from
operations, plus the proceeds from the disposal of Nutricima,
offset by the impacts of electing to cease paying for vendor
financing within the UK and Indonesia, the provision of additional
short-term funding to our PZ Wilmar joint venture, and our elective
repayment of the UK government Covid-19 VAT deferral scheme. Net
assets at 31 May 2021 were GBP381.8m (2020: GBP421.2m). The group
is funded by a GBP325m revolving credit facility, committed until
28 November 2023, of which GBP118m is drawn down as at 31 May 2021
(2020: GBP127m).
Total free cash flow, defined as cash generated from operating
activities less capital expenditure, was GBP64.5m (2020: GBP121.8m)
representing a conversion rate of 70.4% (2020: 133.3%). This
reflects the election to cease paying for vendor financing within
the UK and Indonesia.
The Group's three UK pension schemes have an aggregate
accounting surplus under IAS 19 of GBP29.1m, after the restriction
due to asset ceiling (2020: GBP38.4m). The overseas scheme reported
a deficit of GBP(8.4)m (2020: GBP(7.7)m).
The Board is recommending a final dividend of 3.42p (2020:
3.13p) per share making a total of 6.09p (2020: 5.80p) per share
for the year.
Reconciliation of key alternative performance measures Year ended Restated
to statutory results 31 May *
2021 Year ended
31 May 2020
Profit before tax from continuing operations GBP63.2m GBP18.3m
Adjusting items before taxation(1) GBP5.4m GBP43.5m
-------------------------------------------------------- ------------ -------------
Adjusted profit before tax from continuing operations GBP68.6m GBP61.8m
Net finance costs GBP2.4m GBP4.1m
Depreciation and amortisation GBP20.6m GBP25.5m
-------------------------------------------------------- ------------ -------------
Adjusted EBITDA GBP91.6m GBP91.4m
-------------------------------------------------------- ------------ -------------
Cash generated from operations GBP73.4m GBP128.5m
Less: Capital expenditure GBP(8.9)m GBP(6.7)m
-------------------------------------------------------- ------------ -------------
Free cash flow GBP64.5m GBP121.8m
-------------------------------------------------------- ------------ -------------
Free cash flow conversion rate(^) 70.4% 133.3%
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
(^) free cash flow conversion rate is calculated as free cash
flow divided by adjusted EBITDA
A complete set of alternative performance measures, with
reconciliations to statutory numbers, will be provided in the
Annual Report and Financial Statements in due course.
Reporting segments - continuing operations
Restated
* Reported Constant currency
Revenue (GBPm) 2021 2020 % change % change
Europe & the Americas 216.9 208.0 +4.3% +4.8%
Asia Pacific 187.2 185.2 +1.1% +1.7%
Africa 192.6 187.5 +2.7% +16.2%
Central 6.6 6.5 +1.5% +3.1%
------- --------- ---------- --------------------
603.3 587.2 +2.7% +7.1%
------- --------- ---------- --------------------
Adjusted operating profit/(loss)
(1) (GBPm)
Europe & the Americas 52.1 54.3 (4.1)% (3.7)%
Asia Pacific 20.7 18.5 +11.9% +15.0%
Africa 10.7 (7.6) +241% +262%
Central (12.5) 0.7 (1886)% (2183)%
------- --------- ---------- ------------------
71.0 65.9 7.7% 7.6%
------- --------- ---------- ------------------
Statutory operating profit/(loss)
(GBPm)
Europe & the Americas 51.0 49.3 +3.4% +4.1%
Asia Pacific 20.8 (19.3) +208% +197%
Africa 9.0 (2.9) +410% +475%
Central (15.2) (4.7) (223)% (217)%
------- --------- ---------- ------------------
65.6 22.4 +193% +222%
------- --------- ---------- ------------------
Consolidated Income Statement
Year ended 31 May 2021
(Restated)*
Year ended 31 May 2021 Year ended 31 May 2020
---------------------------------- ---------------------------------------
Business Business
performance Statutory performance Adjusting Statutory
excluding Adjusting results excluding items results
adjusting items for the adjusting (note for the
items (note 2) year items 2) year
Notes GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Continuing operations
Revenue 1 603.3 - 603.3 587.2 - 587.2
Cost of sales (366.4) - (366.4) (360.2) - (360.2)
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Gross profit 236.9 - 236.9 227.0 - 227.0
Selling and distribution
costs (100.3) - (100.3) (91.7) - (91.7)
Administrative expenses (71.2) (5.4) (76.6) (72.2) (43.5) (115.7)
Share of results of
joint ventures 5.6 - 5.6 2.8 - 2.8
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Operating profit/(loss) 1 71.0 (5.4) 65.6 65.9 (43.5) 22.4
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Finance income 1.5 - 1.5 0.9 - 0.9
Finance costs (3.9) - (3.9) (5.0) - (5.0)
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Net finance costs (2.4) - (2.4) (4.1) - (4.1)
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Profit/(loss) before
taxation 68.6 (5.4) 63.2 61.8 (43.5) 18.3
Taxation 3 (14.4) (13.8) (28.2) (14.5) 5.0 (9.5)
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Profit/(loss) for
the year from continuing
operations 54.2 (19.2) 35.0 47.3 (38.5) 8.8
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Discontinued operations
(Loss)/profit from
discontinued operations 8 (5.3) (46.3) (51.6) (2.4) 13.3 10.9
Profit/(loss) for
the year 48.9 (65.5) (16.6) 44.9 (25.2) 19.7
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Attributable to:
Owners of the Parent 49.6 (66.2) (16.6) 48.5 (25.0) 23.5
Non-controlling interests (0.7) 0.7 - (3.6) (0.2) (3.8)
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
48.9 (65.5) (16.6) 44.9 (25.2) 19.7
---------------------------- ----- ------------ --------- --------- ------------ -------------- ---------
Basic EPS (p) 5 11.85 (15.82) (3.97) 11.59 (5.97) 5.62
Diluted EPS (p) 5 11.84 (15.80) (3.96) 11.59 (5.97) 5.62
From continuing operations:
Basic EPS (p) 5 13.12 (4.75) 8.37 12.17 (9.16) 3.01
Diluted EPS (p) 5 13.10 (4.75) 8.35 12.17 (9.16) 3.01
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Consolidated Statement of Comprehensive Income
Year ended 31 May 2021
Notes
(Restated)*
2021 2020
GBPm GBPm
--------------------------------------------------------- ----- ------ ------------
(Loss)/profit for the year (16.6) 19.7
Other comprehensive (expense) / income
Items that will not be reclassified to profit
or loss
Re-measurement of post-employment benefit obligations (9.5) 1.9
Deferred tax gain/(loss) on re-measurement of
post-employment benefit obligations 2.4 (0.4)
Total items that will not be reclassified to
profit or loss (7.1) 1.5
Items that may be subsequently reclassified to
profit or loss
Exchange differences on translation of foreign
operations (31.9) (6.5)
Deferred tax on foreign exchange related to quasi-equity
loans 1.4 -
Cash flow hedges - fair value loss in year net
of taxation (0.6) (0.4)
Cost of hedging reserve 0.2 0.1
Recycle of foreign exchange equity reserves on
disposals 8 39.9 -
Recycle of equity reserves on disposal of subsidiary - (8.6)
Total items that may be subsequently reclassified
to profit or loss 9.0 (15.4)
--------------------------------------------------------- ----- ------ ------------
Other comprehensive income/(expense) for the
year net of taxation 1.9 (13.9)
--------------------------------------------------------- ----- ------ ------------
Total comprehensive (expense)/income for the
year (14.7) 5.8
Attributable to:
Owners of the Parent (9.7) 9.8
Non-controlling interests (5.0) (4.0)
--------------------------------------------------------- ----- ------ ------------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Consolidated Balance Sheet
At 31 May 2021 Notes 31 May
2021 (Restated)*
GBPm 31 May
2020
GBPm
-------------------------------------------- ------ ------- -------------
Assets
Non-current assets
Goodwill and other intangible assets 6 297.5 304.4
Property, plant and equipment 91.5 112.3
Long-term right-of-use assets 11.7 13.7
Net investments in joint ventures 34.2 40.9
Deferred taxation assets 5.9 15.4
Tax receivable 1.7 6.9
Retirement benefit surplus 33.6 42.9
-------------------------------------------- ------ ------- -------------
476.1 536.5
-------------------------------------------- ------ ------- -------------
Current assets
Inventories 91.1 104.6
Trade and other receivables 110.7 104.1
Derivative financial assets 1.0 0.7
Current tax receivable 14.2 9.6
Current asset investments 0.3 0.3
Cash and short-term deposits 87.0 78.7
-------------------------------------------- ------ ------- -------------
304.3 298.0
Assets held for sale 9 7.6 20.5
-------------------------------------------- ------ ------- -------------
311.9 318.5
-------------------------------------------- ------ ------- -------------
Total assets 788.0 855.0
-------------------------------------------- ------ ------- -------------
Equity
Share capital 4.3 4.3
Capital redemption reserve 0.7 0.7
Hedging reserve (0.4) -
Currency translation reserve (87.4) (100.5)
Other reserve (39.1) (39.0)
Retained earnings 483.7 530.3
-------------------------------------------- ------ ------- -------------
Attributable to owners of the parent 361.8 395.8
Non-controlling interests 20.0 25.4
-------------------------------------------- ------ ------- -------------
Total equity 381.8 421.2
-------------------------------------------- ------ ------- -------------
Liabilities
Non-current liabilities
Borrowings 118.0 127.0
Other payables 0.3 0.4
Long-term lease liability 8.7 10.4
Deferred taxation liabilities 75.2 65.6
Retirement & other long-term employee
benefit obligations 12.9 12.2
-------------------------------------------- ------ ------- -------------
215.1 215.6
-------------------------------------------- ------ ------- -------------
Current liabilities
Overdrafts - 1.2
Trade and other payables 150.9 161.8
Short-term lease liability 3.1 3.4
Derivative financial liabilities 0.7 0.9
Current taxation payable 35.2 47.7
Provisions 0.7 3.2
-------------------------------------------- ------ ------- -------------
190.6 218.2
Liabilities directly associated with assets
held for sale 9 0.5 -
-------------------------------------------- ------ ------- -------------
Total liabilities 406.2 433.8
-------------------------------------------- ------ ------- -------------
Total equity and liabilities 788.0 855.0
-------------------------------------------- ------ ------- -------------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Consolidated Statement of Changes in Equity
Year ended 31 May 2021
Attributable to owners of the Parent
-------- ---------------------------------------------------------
Currency Capital Non-
Share translation redemption Retained Other Hedging controlling
capital reserve reserve earnings reserve reserve interests Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
At 1 June 2019 4.3 (84.5) 0.7 538.8 (39.0) 0.3 29.2 449.8
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
Profit for the
year (restated)* - - - 23.5 - - (3.8) 19.7
Other
comprehensive
income/(expense):
Re-measurement of
post-employment
obligations - - - 1.9 - - - 1.9
Exchange
differences on
translation of
foreign
operations
(restated)* - (6.3) - - - - (0.2) (6.5)
Cash flow hedges -
fair value loss
in
year net of
taxation - - - - - (0.4) - (0.4)
Cost of hedging
reserve - - - - - 0.1 - 0.1
Sale of subsidiary
- recycle of
equity
reserves - (9.7) - 1.1 - - - (8.6)
Deferred tax on
re-measurement of
post-employment
obligations - - - (0.4) - - - (0.4)
Total
comprehensive
income/(expense)
for
the year
(restated)* - (16.0) - 26.1 - (0.3) (4.0) 5.8
Transactions with
owners:
Ordinary dividends 4 - - - (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
(restated)* 4.3 (100.5) 0.7 530.3 (39.0) - 25.4 421.2
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
At 1 June 2020 4.3 (100.5) 0.7 530.3 (39.0) - 25.4 421.2
Loss for the year - - - (16.6) - - - (16.6)
Other
comprehensive
income/(expense):
Re-measurement of
post-employment
obligations - - - (9.5) - - - (9.5)
Exchange
differences on
translation of
foreign
operations - (26.8) - - (0.1) - (5.0) (31.9)
Cash flow hedges -
fair value loss
in
year net of
taxation - - - - - (0.6) - (0.6)
Cost of hedging
reserve - - - - - 0.2 - 0.2
Disposals -
recycle of equity
reserves 8 - 39.9 - - - - - 39.9
Deferred tax on
re-measurement of
post-employment
obligations 3 - - - 2.4 - - - 2.4
Deferred tax on
foreign exchange
related
to quasi-equity
loans - - - 1.4 - - - 1.4
Total
comprehensive
income/(expense)
for
the year - 13.1 - (22.3) (0.1) (0.4) (5.0) (14.7)
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
Transactions with
owners:
Ordinary dividends 4 - - - (24.3) - - - (24.3)
Non-controlling
interests
dividend paid - - - - - - (0.2) (0.2)
Acquisition of
non-controlling
interests - - - - - - (0.2) (0.2)
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
Total transactions
with owners
recognised
directly in
equity - - - (24.3) - - (0.4) (24.7)
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
At 31 May 2021 4.3 (87.4) 0.7 483.7 (39.1) (0.4) 20.0 381.8
------------------ ----- -------- ------------ ----------- ---------- -------- -------- ------------ ------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Consolidated Cash Flow Statement
Year ended 31 May 2021
(Restated)*
2021 2020
Notes GBPm GBPm
-------------------------------------------------- ----- ------ -----------
Cash flows from operating activities
Cash generated from operations 73.4 128.5
Taxation paid (20.0) (16.8)
Interest paid (2.9) (5.1)
-------------------------------------------------- ----- ------ -----------
Net cash generated from operating activities 50.5 106.6
-------------------------------------------------- ----- ------ -----------
Cash flows from investing activities
Interest income 1.2 0.9
Investment income 0.3 -
Purchase of property, plant and equipment and
software (8.9) (6.7)
Proceeds from sale of assets 0.1 0.6
Cash flow from disposal of companies & businesses 16.2 44.4
Repayment of loans by joint ventures 3.4 -
Funding provided to joint venture (9.6) (1.5)
-------------------------------------------------- ----- ------ -----------
Net cash generated from investing activities 2.7 37.7
-------------------------------------------------- ----- ------ -----------
Cash flows from financing activities
Dividends paid to non-controlling interests (0.2) (0.3)
Dividends paid to Company shareholders 4 (24.3) (34.6)
Acquisition of non-controlling interests (1.1) -
IFRS 16 finance lease payments (4.0) (3.2)
Repayment of loan facility (9.0) (79.0)
-------------------------------------------------- ----- ------ -----------
Net cash used in financing activities (38.6) (117.1)
-------------------------------------------------- ----- ------ -----------
Net increase in cash and cash equivalents 14.6 27.2
-------------------------------------------------- ----- ------ -----------
Cash and cash equivalents at the beginning of
the year 77.5 51.9
-------------------------------------------------- ----- ------ -----------
Effect of foreign exchange rates (5.1) (1.6)
-------------------------------------------------- ----- ------ -----------
Cash and cash equivalents at the end of the year 87.0 77.5
-------------------------------------------------- ----- ------ -----------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Reconciliation of profit before tax to cash generated from
operations
Year ended 31 May 2021
(Restated)*
2021 2020
GBPm GBPm
------------------------------------------------------------ ------ -----------
Profit before tax from continuing operations 63.2 18.3
(Loss)/Profit before tax from discontinued operations (46.9) 11.9
------------------------------------------------------------ ------ -----------
Profit before tax 16.3 30.2
Adjustment for net finance costs 2.4 4.1
------------------------------------------------------------ ------ -----------
Operating profit 18.7 34.3
Depreciation 14.3 18.7
Amortisation (note 6) 6.3 6.8
Impairment of tangible and intangible assets 0.5 42.9
Impairment reversal on intangible fixed assets reclassified
as held for sale (note 6) (1.5) -
Impairment of equity investment in joint venture 2.2 -
Loss/(profit) on sale of assets 0.4 0.3
Non-monetary acquisition of investment property (note
2) - (5.6)
Loss/(profit) on disposal of companies & businesses
(note 8) 40.7 (22.2)
Other recycling of foreign exchange losses 0.6 -
Difference between pension charge and cash contributions 0.5 (3.9)
Share of results from joint ventures (5.6) (2.8)
------------------------------------------------------------ ------ -----------
Operating cash flows before movements in working capital 77.1 68.5
------------------------------------------------------------ ------ -----------
Movements in working capital:
Inventories 2.2 10.8
Trade and other receivables (5.9) 39.1
Trade and other payables 1.3 10.4
Provisions (1.3) (0.3)
------------------------------------------------------------ ------ -----------
Cash generated from operations 73.4 128.5
------------------------------------------------------------ ------ -----------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Notes to the Financial Statements
1. Segmental analysis
The segmental information presented in the note is consistent
with management reporting provided to the Executive Leadership Team
('ELT'), which is the Chief Operating Decision Maker ('CODM'). The
CODM reviews the Group's internal reporting in order to assess
performance and allocate resources and has determined the operating
segments based on these reports which include an allocation of
central revenue and costs as appropriate. The CODM considers the
business from a geographic perspective, with Europe & the
Americas, Asia Pacific, Africa and Central being the operating
segments.
In accordance with IFRS 8 'Operating Segments', the ELT has
identified these reportable segments which aggregate the Group's
trading entities by geographic location as these entities are
considered to have similar economic characteristics. The number of
countries that the Group operates in within these segments is
limited to no more than five countries per segment, which share
similar customer bases and encounter comparable micro environmental
challenges.
The CODM assesses the performance based on operating profit
before any adjusting items. Revenues and operating profit of the
Europe & the Americas and Asia Pacific segments arise from the
sale of Hygiene, Beauty and Baby products. Revenue and operating
profit from the Africa segment also arise from the sale of Hygiene,
Beauty and Baby products as well as 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 headquarters and above market functions
net of recharges to our regions. The prices between Group companies
for intra-group sales of materials, manufactured goods, and charges
for franchise fees and royalties, are carried out on an arm's
length basis.
Reporting used by the CODM to assess performance does contain
information about brand specific performance but global
segmentation between the portfolio of brands is not part of the
regular internally reported financial information.
In November 2020, the Group made a change to report a "Central"
operating segment; this was previously within "Europe & the
Americas". The change was made as a result of the new Chief
Operating Decision Maker ("CODM") deciding that the Group's
segmental reporting, and internal reporting, should better reflect
the way in which the business is managed and to more clearly be
able to identify and manage the performance of the Europe & the
Americas segment separate from that of the Central activities.
Reporting segments
Continuing operations
2021 Europe Asia Africa Central Eliminations Total
& the Americas Pacific GBPm GBPm GBPm GBPm
GBPm GBPm
----------------------------- ---------------- --------- ------- -------- ------------- ------
Gross segment revenue 220.9 194.5 192.6 50.9 (55.6) 603.3
Inter segment revenue (4.0) (7.3) - (44.3) 55.6 -
------------------------------ ---------------- --------- ------- -------- ------------- ------
Revenue 216.9 187.2 192.6 6.6 - 603.3
------------------------------ ---------------- --------- ------- -------- ------------- ------
Segmental operating profit
before adjusting items and
share of results of joint
ventures 52.1 20.7 5.1 (12.5) - 65.4
Share of results of joint
ventures - - 5.6 - - 5.6
------------------------------ ---------------- --------- ------- -------- ------------- ------
Segmental operating profit
before adjusting items 52.1 20.7 10.7 (12.5) - 71.0
Adjusting items (1.1) 0.1 (1.7) (2.7) - (5.4)
------------------------------ ---------------- --------- ------- -------- ------------- ------
Segmental operating profit 51.0 20.8 9.0 (15.2) - 65.6
------------------------------ ---------------- --------- ------- -------- ------------- ------
Finance income 1.5
Finance costs (3.9)
------------------------------ ---------------- --------- ------- -------- ------------- ------
Profit before taxation 63.2
------------------------------ ---------------- --------- ------- -------- ------------- ------
Continuing operations Europe Asia Africa Central^ Eliminations Total
2020 (restated)* & 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
adjusting items
and share of results
of joint ventures 54.3 18.5 (10.4) 0.7 - 63.1
Share of results
of joint ventures - - 2.8 - - 2.8
------------------------ ---------------- --------- ------- --------- ------------- -------
Segmental operating
profit before
adjusting items 54.3 18.5 (7.6) 0.7 - 65.9
Adjusting items (5.0) (37.8) 4.7 (5.4) - (43.5)
------------------------ ---------------- --------- ------- --------- ------------- -------
Segmental operating
profit 49.3 (19.3) (2.9) (4.7) - 22.4
------------------------ ---------------- --------- ------- --------- ------------- -------
Finance income 0.9
Finance costs (5.0)
------------------------ ---------------- --------- ------- --------- ------------- -------
Profit before
taxation 18.3
------------------------ ---------------- --------- ------- --------- ------------- -------
^ In the financial statements for the year ended
31 May 2020 'Central' was included within 'Europe
& the Americas'.
*The results for the year ended 31 May 2020 have
been restated to reflect prior year adjustments.
Further details are set out in note 10 .
The Group's parent company is domiciled in the UK. The split of
revenue from external customers and non-current assets between the
UK, Nigeria and rest of the world (other) is:
UK Nigeria Other Total
2021 GBPm GBPm GBPm GBPm
------------------------------------- ----- ------- ----- -----
Revenue 197.3 163.6 242.4 603.3
Goodwill and other intangible assets 268.9 3.0 25.6 297.5
Property, plant and equipment 24.1 42.8 24.6 91.5
Long-term right-of-use assets 7.3 1.2 3.2 11.7
Net investment in joint ventures 34.2 - - 34.2
UK Nigeria Other Total
2020 (Restated)* GBPm GBPm GBPm GBPm
------------------------------------- ----- ------- ----- -----
Revenue 193.0 156.5 237.7 587.2
Goodwill and other intangible assets 271.5 2.7 30.2 304.4
Property, plant and equipment 27.0 55.1 30.2 112.3
Long-term right-of-use assets 7.5 1.6 4.6 13.7
Net investment in joint ventures 40.9 - - 40.9
------------------------------------- ----- ------- ----- -----
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
The Group analyses its revenue by the following categories:
2021 2020
GBPm GBPm
------------ ----- -----
Hygiene 322.4 321.1
Baby 100.0 98.3
Beauty 74.1 66.6
Electricals 79.4 76.2
Other 27.4 25.0
------------ ----- -----
603.3 587.2
------------ ----- -----
2. Adjusting Items
The Group adopts a columnar Income Statement format to highlight
significant items within the Group's results for the year. Such
items are those debits or credits which, in the opinion of the
Directors, should be excluded in order to provide a consistent and
comparable alternative view of the performance of the Group's
ongoing business. Generally, this will include those items that are
largely one-off and material in nature as well as income or
expenses relating to acquisitions or disposals of businesses or
other transactions of a similar nature. The Directors apply
judgement in assessing the particular items, which by virtue of
their magnitude and nature should be disclosed in a separate column
of the Income Statement and notes to the Financial Statements as
'Adjusting items'.
The Directors believe that the separate disclosure of these
items is relevant to an understanding of the Group's financial
performance by providing a more meaningful basis upon which to
analyse underlying business performance and make year-on-year
comparisons. 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
represents a change from the Group's previous practice of reporting
exceptional items and will be adopted on a consistent basis for
each of the half year and full year results going forward.
This change was made recognising the views of European
Securities and Markets Authority, the Financial Reporting Council,
and changes in market practice..
Adjusting Adjusting
Year to 31 May 2021 items before items after
taxation Taxation taxation
Adjusting items included within continuing operations: GBPm GBPm GBPm
-------------------------------------------------------- ------------- -------- ------------
Group and regional restructuring 2.8 (0.5) 2.3
Impact of classification of five:am assets as
held for sale (1.2) 0.3 (0.9)
Nigeria simplification 3.8 (0.2) 3.6
UK tax rate change - deferred tax impact - 14.2 14.2
-------------------------------------------------------- ------------- -------- ------------
5.4 13.8 19.2
Adjusting items included within discontinued
operations:
-------------------------------------------------------- ------------- -------- ------------
Loss on disposal of Nutricima assets 40.7 5.2 45.9
Disposal of Luksja brand 0.4 - 0.4
41.1 5.2 46.3
-------------------------------------------------------- ------------- -------- ------------
Total adjusting items 46.5 19.0 65.5
-------------------------------------------------------- ------------- -------- ------------
Restated* Restated* Restated*
Adjusting Adjusting
Year to 31 May 2020 items before items after
taxation Taxation taxation
Adjusting items included within continuing operations: GBPm GBPm GBPm
-------------------------------------------------------- ------------- --------- ------------
Group structure & systems project 4.9 (1.1) 3.8
Group strategy project 3.5 - 3.5
Profit on sale of Greece business 3.1 - 3.1
Profit on sale of Luksja brand 1.0 - 1.0
Impairment of Australian assets 36.6 (5.3) 31.3
Gain on exchange of land for investment property (5.6) 1.4 (4.2)
43.5 (5.0) 38.5
Adjusting items included within discontinued
operations:
-------------------------------------------------------- ------------- --------- ------------
Group strategy 2.4 - 2.4
Profit on sale of Greece business (11.0) - (11.0)
Profit on sale of Luksja brand (6.1) 1.4 (4.7)
-------------------------------------------------------- ------------- --------- ------------
(14.7) 1.4 (13.3)
-------------------------------------------------------- ------------- --------- ------------
Total adjusting items 28.8 (3.6) 25.2
-------------------------------------------------------- ------------- --------- ------------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
3. Taxation
Restated
2021 2020
GBPm GBPm
--------------------------------------------- ------ --------
Current tax
UK corporation tax charge for the year 8.5 7.8
Adjustments in respect of prior years 1.6 0.1
Double tax relief (1.0) (0.8)
--------------------------------------------- ------ --------
9.1 7.1
Overseas corporation tax charge for the year 0.9 10.9
Adjustments in respect of prior years (0.2) (0.4)
--------------------------------------------- ------ --------
0.7 10.5
--------------------------------------------- ------ --------
Total current tax charge 9.8 17.6
Deferred tax
Origination and reversal of temporary timing
differences 5.1 (12.4)
Adjustments in respect of prior years 3.6 0.4
Effect of rate change adjustments (including
adjusting item of GBP14.2m (2020 - GBPnil) 14.4 4.9
--------------------------------------------- ------ --------
Total deferred tax charge 23.1 (7.1)
--------------------------------------------- ------ --------
Total tax charge 32.9 10.5
--------------------------------------------- ------ --------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Within the tax charge for the year, GBP19.0m is classified
within adjusting items, of which GBP19.4m is deferred tax and a
credit of GBP0.4m is current tax. Further detail included in note
2.
UK corporation tax is calculated at 19.0% (2020: 19.0%) of the
estimated assessable profit for the year. Taxation for other
jurisdictions is calculated at the rates prevailing in the
respective jurisdictions. UK deferred tax has been remeasured at
25% following the enactment of UK Finance Act 2021, an impact of
GBP14.2m which has been included in adjusting items.
The Group has chosen to use the UK corporation tax rate for the
reconciliation of the charge for the year to the profit before
taxation per the Consolidated Income Statement, as this is where
the majority of the Group's profit is derived.
2021 (Restated)*
GBPm 2020
GBPm
Profit before tax from continuing operations 63.2 18.3
(Loss)/profit before tax from discontinued operations (46.9) 11.9
-------------------------------------------------------------- ------ ----------------
Profit before tax 16.3 30.2
-------------------------------------------------------------- ------ ----------------
Tax at the UK Corporation tax rate of 19.0% (2020: 19.0%) 3.1 5.7
Adjusted for:
Tax effect of expenses that are not deductible/taxable 15.8 8.7
Tax effect of non-taxable income (2.9) (6.8)
Effect of rate changes on deferred taxation (all territories) 14.4 4.9
Tax effect of share of results of joint ventures (1.7) (0.9)
Other taxes suffered 2.4 1.3
Net adjustment to amount carried in respect of uncertain
tax positions (6.8) 0.1
Movements in deferred tax assets not recognised 8.1 0.2
Adjustments in respect of prior years 5.0 0.1
Difference in foreign tax rates (non-UK residents) (4.5) ( 2.8)
Tax charge for the year 32.9 10.5
-------------------------------------------------------------- ------ ----------------
Tax charge attributable to continuing operations 28.2 9.5
Tax charge attributable to discontinued operations 4.7 1.0
-------------------------------------------------------------- ------ ----------------
Tax charge for the year 32.9 10.5
-------------------------------------------------------------- ------ ----------------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
Taxation on items taken directly to equity and other
comprehensive income was a credit of GBP3.8m (2020: gain of
GBP3.7m) and relates to deferred tax on pensions and foreign
exchange differences on intercompany loans.
4. AGM & Dividend
The Board is recommending a final dividend of 3.42 p (2020: 3.1
3p ) per share, making a total dividend for the year of 6.09 p
(2020: 5.80p) per share. The gross amount for the proposed final
dividend is GBP14.3 million (2020: GBP13.1 million).
The date of the Annual General Meeting has been fixed for 23
November 2021. Subject to shareholder approval, the final dividend
will be paid on 30 November 2021 to members on the register at the
close of business on 22 October 2021.
5. Earnings per share
Earnings per share ('EPS') represents the amount of earnings
(post-tax profits/losses) attributable to each ordinary share in
issue. Basic EPS is calculated by dividing the earnings (profit
after tax in accordance with IFRS) attributable to owners of the
Parent by the weighted average number of ordinary shares that were
in issue during the year. Diluted EPS demonstrates the impact if
all outstanding share options that would vest on their future
maturity dates if the conditions at the end of the reporting period
were the same as those at the end of the contingency period (such
as those to be issued under employee share schemes) were exercised
and treated as ordinary shares as at the balance sheet date.
2021 2020
Number Number
000 000
------------------------- -------- --------
Basic weighted average 418,402 418,353
------------------------- -------- --------
Diluted weighted average 419,016 418,353
------------------------- -------- --------
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, while any
difference between the basic and diluted weighted average number of
shares represents the potentially dilutive effect of the Executive
Share Option Schemes and the Performance Share Plan. The average
number of shares is reconciled to the basic and diluted weighted
average number of shares below:
2021 Number 2020 Number
000 000
--------------------------------------------------------- ------------- -------------
Average number of ordinary shares in issue during the
year 428,725 428,725
Less: weighted average number of shares held by Employee
Share Option Trust (10,323) (10,372)
--------------------------------------------------------- ------------- -------------
Basic weighted average shares in issue during the year 418,402 418,353
Dilutive effect of share incentive plans 614 -
--------------------------------------------------------- ------------- -------------
Diluted weighted average shares in issue during the
year 419,016 418,353
--------------------------------------------------------- ------------- -------------
Total Earnings Per Share
(Restated)*
2021 2020
GBPm GBPm
------------------------------------------------------- ------ -----------
(Loss)/profit after tax attributable to owners of the
parent (16.6) 23.5
Adjusting items after taxation, attributable to owners
of the parent 66.2 25.0
------------------------------------------------------- ------ -----------
Adjusted profit after tax attributable to owners of
the parent 49.6 48.5
------------------------------------------------------- ------ -----------
(Restated)*
2021 2020
pence pence
------------------------------------ ------- -----------
Basic (loss)/earnings per share (3.97) 5.62
Impact of adjusting items 15.82 5.97
------------------------------------ ------- -----------
Adjusted basic earnings per share 11.85 11.59
------------------------------------ ------- -----------
Diluted (loss)/earnings per share (3.96) 5.62
Impact of adjusting items 15.80 5.97
------------------------------------ ------- -----------
Adjusted diluted earnings per share 11.84 11.59
------------------------------------ ------- -----------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
From continuing operations
(Restated)*
2021 2020
GBPm GBPm
--------------------------------------------------------- ------ -----------
Profit from continuing operations attributable to owners
of the parent 35.0 12.6
Adjusting items after taxation, attributable to owners
of the parent 19.9 38.3
--------------------------------------------------------- ------ -----------
Adjusted profit after tax attributable to owners of
the parent 54.9 50.9
--------------------------------------------------------- ------ -----------
(Restated)*
2021 2020
pence pence
------------------------------------ ------ -----------
Basic diluted earnings per share 8.37 3.01
Impact of adjusting items 4.75 9.16
------------------------------------ ------ -----------
Adjusted basic earnings per share 13.12 12.17
------------------------------------ ------ -----------
Diluted earnings per share 8.35 3.01
Impact of adjusting items 4.75 9.16
------------------------------------ ------ -----------
Adjusted diluted earnings per share 13.10 12.17
------------------------------------ ------ -----------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
From discontinued operations
(Restated)*
2021 2020
GBPm GBPm
------------------------------------------------------- ------ -----------
(Loss)/profit after tax from discontinued operations
attributable to owners of the parent (51.6) 10.9
Adjusting items after taxation, attributable to owners
of the parent 46.3 (13.3)
------------------------------------------------------- ------ -----------
Adjusted loss after tax attributable to owners of the
parent (5.3) (2.4)
------------------------------------------------------- ------ -----------
(Restated)*
2021 2020
pence pence
------------------------------------ ------- -----------
Basic (loss) / earnings per share (12.33) 2.61
Impact of adjusting items 11.06 (3.18)
------------------------------------ ------- -----------
Adjusted basic loss per share (1.27) (0.57)
------------------------------------ ------- -----------
Diluted earnings per share (12.31) 2.61
Impact of adjusting items 11.06 (3.18)
------------------------------------ ------- -----------
Adjusted diluted earnings per share (1.26) (0.57)
------------------------------------ ------- -----------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
6. Goodwill and other intangible assets
Goodwill Software Brands Total
GBPm GBPm GBPm GBPm
----------------------------------------------- -------- -------- ------ ------
Cost
At 1 June 2019 70.4 60.0 286.4 416.8
Currency retranslation (0.1) (0.1) - (0.2)
Additions - 1.7 - 1.7
Sale of subsidiary (1.2) (1.0) (8.9) (11.1)
Reclassifications from property, plant
and equipment - 2.6 - 2.6
Reclassified as held for sale (note 9) - - (9.2) (9.2)
At 31 May 2020 69.1 63.2 268.3 400.6
Currency retranslation (0.1) (0.8) 0.3 (0.6)
Additions - 2.4 - 2.4
Acquisition of non-controlling interest 0.9 - - 0.9
Disposals (2.9) (0.8) - (3.7)
Reclassifications from property, plant
and equipment - 1.3 - 1.3
Reclassified as held for sale (note 9) (21.5) - (32.8) (54.3)
Revised analysis between cost and amortisation
of intangible assets & between categories 8.4 0.7 (2.6) 6.5
At 31 May 2021 53.9 66.0 233.2 353.1
----------------------------------------------- -------- -------- ------ ------
Accumulated amortisation & impairment
At 1 June 2019 19.4 15.4 12.8 47.6
Currency retranslation 0.2 - 1.5 1.7
Charge for the year - 6.8 - 6.8
Sale of subsidiary - (1.0) - (1.0)
Impairment loss 6.7 6.3 28.1 41.1
At 31 May 2020 26.3 27.5 42.4 96.2
Currency retranslation 0.3 (0.3) - -
Charge for the year - 6.3 - 6.3
Disposals (2.9) (0.7) - (3.6)
Impairment reversal - - (1.5) (1.5)
Reclassified as held for sale (note 9) (21.5) - (26.8) (48.3)
Revised analysis between cost and amortisation
of intangible assets & between categories 8.4 - (1.9) 6.5
----------------------------------------------- -------- -------- ------ ------
At 31 May 2021 10.6 32.8 12.2 55.6
----------------------------------------------- -------- -------- ------ ------
Net book values
----------------------------------------------- -------- -------- ------ ------
At 31 May 2021 43.3 33.2 221.0 297.5
----------------------------------------------- -------- -------- ------ ------
At 31 May 2020 42.8 35.7 225.9 304.4
----------------------------------------------- -------- -------- ------ ------
Goodwill and other intangible assets (excluding software), which
include the Group's acquired brands, all have indefinite useful
lives and 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 determined through
value-in-use calculations that use cash flow projections from
approved budgets and plans over a period of five-year which are
then extrapolated beyond the five-year period based on estimated
long-term growth rates.
Having performed the annual impairment tests, no impairments
have been recognised in FY21. In forming this conclusion the
Directors reviewed a sensitivity analysis performed by management,
which focused on the reasonably possible downsides of key
assumptions, both individually and in reasonably possible
combinations, and considered whether these reasonably possible
downsides give rise to an impairment, with the conclusion that no
reasonable possible changes in key assumptions would cause the
recoverable amount of the CGUs to be less than their carrying
value.
Full disclosures on the methodology used for impairment testing
including the results of the tests will be detailed in the notes to
the Financial Statements for the year ended 31 May 2021.
7. Net debt (excluding lease liabilities)
The Group considers Net debt (excluding lease liabilities) to be
an important alternative performance measure, on the basis that
this measure forms the basis of the Net debt to EBITDA covenant in
relation to the Group's Revolving Credit Facility (RCF). The Group
had net debt (excluding lease liabilities) positions as at 31 May
2021 and 31 May 2020 respectively, as shown below:
GBPm 31 May 2021 31 May 2020
---------------------------------------- -------------- --------------
Cash at bank and in hand 79.4 77.8
Short-term deposits 7.6 0.9
Bank overdrafts - (1.2)
Cash and cash equivalents 87.0 77.5
Current asset investments 0.3 0.3
Non-current interest-bearing loans and
borrowings (118.0) (127.0)
---------------------------------------- -------------- --------------
Net debt (excluding lease liabilities) (30.7) (49.2)
IFRS 16 liabilities of GBP11.8m (2020: GBP13.7m) have been
excluded from this metric.
Loans due in greater than one year include the Group's main
borrowing facility. This is provided by a syndicate of lenders in
the form of a GBP325 million RCF committed until 28 November
2023.
8. Discontinued operations
On 18 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. The assets included in the sale were land
& buildings and plant & machinery of the Nutricima factory,
intellectual property relating to the brands of Nutricima and the
inventory holding of Nutricima on the date of disposal.
Following completion of the sale, Nutricima Ltd ceased to make
commercial sales, but final business activities, such as collection
of remaining debtors and settlement of liabilities continued until
May 2021.
As at 31 May 2021, the only material balance remaining on the
balance sheet of Nutricima Ltd relates to long-term quasi-equity
loans from its parent company, Milk Ventures (UK) Ltd. These loans
are predominantly denominated in USD. As the activities of this
foreign operation have now ceased, such that there has been a
disposal per the definition in IAS 21.48, all foreign exchange
differences arising in connection with this foreign operation have
now been reclassified to the income statement. This includes the
foreign exchange differences arising on translation of these
long-term quasi-equity loans, which for consolidation purposes were
historically recorded in other comprehensive income and accumulated
in equity in accordance with IAS 21.32. The accumulated losses in
this regard which have now been reclassified to the income
statement within adjusting items totalled GBP37.5m. In addition,
the functional currency of Nutricima Ltd was changed to USD as the
predominant balance remaining in this entity relates to these USD
denominated quasi-equity loans. This led to a further recycling of
foreign exchange accumulated gains in Nutricima Ltd of GBP5.1m,
which is also shown as part of the loss on disposal in adjusting
items. The total amount of recycling foreign exchange related to
the quasi-equity loans in Nutricima is therefore GBP32.4m.
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 & Nutrition operations in Greece as part of the
Europe & 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.
Minerva S.A. was disposed of during the financial year to 31 May
2020 and as such there are no results relating to Minerva S.A. in
the PZ Cussons Group accounts for the year to 31 May 2021. The
discontinued operations in the year to 31 May 2021 relate solely to
Nutricima and Luksja.
The results of the discontinued operations, which have been
included in the Consolidated Income Statement, were as follows:
(Restated)*
Luksja Nutricima 31 May 31 May
2021 2020
GBPm GBPm GBPm GBPm
Revenue 0.3 2.1 2.4 45.5
Expenses (0.3) (7.9) (8.2) (48.4)
------- ---------- ------- ------------
Loss before tax - (5.8) (5.8) (2.9)
Taxation (0.5) 1.0 0.5 0.5
------- ---------- ------- ------------
Loss after tax incurred to date
of disposal (0.5) (4.8) (5.3) (2.4)
Adjusting items (note 2):
Costs of liquidation following
disposal of Luksja (0.4) - (0.4) -
Loss on disposal (see below) - (40.7) (40.7) 14.7
Attributable tax expenses - (5.2) (5.2) (1.4)
------- ---------- ------- ------------
(0.4) (45.9) (46.3) 13.3
------- ---------- ------- ------------
Net (loss)/profit attributable
to discontinued operations
(attributable to owners of the
Company) (0.9) (50.7) (51.6) 10.9
------- ---------- ------- ------------
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
The breakdown of the loss before tax on disposal of Nutricima is
as follows:
GBPm
Total proceeds (cash) 16.2
Assets disposed of:
Property, plant and equipment (7.1)
Intangible assets (9.2)
Inventories (1.8)
Costs of disposal (including GBP7.5m loss
on recycling of historic foreign exchange
reserves in relation to assets sold) (6.4)
--------------------------------------------- -------
Loss on recycling of historical net foreign
exchange losses on quasi-equity loans (32.4)
--------------------------------------------- -------
Loss on disposal, before taxation (40.7)
Total losses on recycling foreign exchange differences related
to Nutricima are GBP39.9m including an amount related to
intercompany quasi-equity loans of GBP32.4m, and the amount related
to historic exchange reserves in relation to assets disposed of
GBP7.5m which is included in the costs of disposal.
The cash flows that are attributable to the activities of the
discontinued operations are as follows:
(Restated)*
31 May 31 May
Luksja Nutricima 2021 2020
GBPm GBPm GBPm GBPm
Net cash generated from/(used
in) operating activities 0.1 (7.6) (7.5) 7.2
Net cash generated from investing
activities 0.1 15.9 16.0 51.1
Net cash (used in) financing activities - - - -
------- ---------- ------- ------------
Net increase in cash and cash
equivalents 0.2 8.3 8.5 58.3
*The results for the year ended 31 May 2020 have been restated
to reflect prior year adjustments. Further details are set out in
note 10.
During the year, cash flows associated with Nutricima
contributed a net amount of GBP8.3m of cash to the Group. Nutricima
Ltd used GBP(7.6)m of cash in operating activities. GBP15.9m of
cash was generated from investing activities, of which GBP11.9m was
generated by Nutricima Ltd predominantly in relation to the sale of
assets, and a further GBP4.0m was generated by PZ Cussons Nigeria
in relation to the sale of the land at the Nutricima factory.
9. Assets held for sale
2021 2020
GBPm GBPm
-------------------------------- ------ -----
Disposal group held for sale(a)
Intangible assets (note 6) 6.0 9.2
Property, plant and equipment 0.3 7.9
Inventory 0.6 3.4
Employee related accruals (0.5) -
Subtotal 6.4 20.5
------ -----
Property, plant and equipment held
for sale (b) 0.7 -
Total 7.1 20.5
------------------------------------ ------- ----
Current assets:
------------------------------------ ------- ----
Assets held for sale 7.6 20.5
------------------------------------ ------- ----
Current liabilities:
------------------------------------ ------- ----
Liabilities directly associated
with assets held for sale (0.5) -
------------------------------------ ------- ----
(a) The disposal group relates to the assets, specified
liabilities and shares of five:am, the Group's yoghurt business in
Australia. The assets and liabilities were held in PZ Cussons
Australia Pty Ltd, whilst the shares in Five AM Life Pty Ltd were
held by PZ Cussons Beauty Australia (Holdings) Pty Ltd at the point
of disposal. The sale of five:am's trade, assets and shares to
Barambah Organics was announced on 7 May 2021. The disposal is
consistent with the Group's strategy of disposing of non-core
brands and activities. The sale completed on 4 June 2021 and as
such the associated assets and liabilities were classified as "held
for sale" at 31 May 2021 in accordance with IFRS 5. The results of
five:am are shown as continuing operations on the basis that the
disposal constituted neither a major line of business or an exit
from a geographical area of operation.
The disposal group as at 31 May 2020 included certain assets of
the Nutricima business. These assets were sold on 28 September
2020. Results of this business are presented within 'discontinued
operations'. See note 8 for further information on discontinued
operations.
(b) The property, plant and equipment held for sale relates to
disused land held in the UK. Discussions regarding the sale of the
land began in September 2020. As at 31 May 2021, the sale was
nearing completion subject to local authority planning regulations
and as such the land was classified as "held for sale" at 31 May
2021 in accordance with IFRS 5. Prior to classifying to held for
sale, the fair value of the land was assessed in accordance with
IAS 16, and an impairment loss of GBP0.3m was recognised in the
income statement.
10. Accounting policies
While the financial information in this preliminary announcement
has been computed in accordance with IFRS, this announcement does
not itself contain sufficient information to comply with IFRS.
The Financial Statements have been prepared in accordance with
International accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial
Reporting Standards (IFRS) adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
The Financial Statements have been prepared on a going concern
basis and on a historical cost basis except for the revaluation of
certain financial assets and financial liabilities (including
derivative instruments and pensions) at fair value through profit
or loss.
The Financial Statements have been prepared using consistent
accounting policies except as stated below.
New and amended standards adopted by the Group
In the current year, the Group has not applied any new IFRS
standards or amendments to standards as those which were amended
were not relevant to the Group's policies or statements.
Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the
Group
Certain new accounting standards and interpretations have been
published that are not mandatory for the 31 May 2021 reporting year
and have not been early adopted by the Group. The Group will
undertake an assessment of the impact of the following new
standards and interpretations in due course:
from FY24
* IFRS 17 'Insurance Contracts';
date TBC
* Amendments to IFRS 10 'Consolidated Financial
Statements' and IAS 28;
from FY22
* Amendments to IFRS 7, IFRS 9 and IAS 39 - Interest
Rate Benchmark Reform;
from FY23
* Amendments to IFRS 3 'Business Combinations';
from FY24
* Amendments to IAS 1 'Presentation of Financial
Statements'; and
from FY24
* Amendments to IAS 8 'Accounting policies, changes in
accounting estimates and errors'
Restatement due to prior year adjustments
As reported in the basis of preparation on page 5, the FRC
conducted a periodic review of the Company's FY20 Annual Report and
Accounts and sought to understand a number of accounting decisions
and judgments. Following that review the Company made certain
corrections or clarifications in our financial reporting. These
reclassifications were identified as part of the FRC's review, with
the error related to Ghanain investment property being identified
as part of the preparation of the current year financial
statements. These corrections are as follows:
Reclassification between Continuing and Discontinued
Operations
Certain amounts reported within 'continuing operations' on the
face of the Consolidated Income Statement are more appropriately
included within discontinued operations. Specifically, the post-tax
loss of discontinued operations was appropriately reported in the
income statement line item 'Loss from discontinued operations'.
However, the post-tax gains recognised on the disposal of the
disposal groups constituting the discontinued operations, totalling
GBP15.0m, were reported in the 'Administrative expenses' and
'Taxation' lines within continuing operations, albeit separately
highlighted as exceptional. The impact of this is to increase
continuing administrative expenses by GBP16.4m, decrease continuing
taxation charge by GBP1.4m and increase the profit from
discontinued operations by GBP15.0m.
Reclassification between Cash Generated from Operating
Activities and Investing Activities
In the consolidated cash flow statement, cash proceeds of
GBP9.2m received in relation to the Luksja discontinued operations
were included within operating activities. These should have been
adjusted for in 'Cash generated from operations' and then shown in
the 'Cash inflows from investing activities' section as 'Cash flow
from disposal of companies and businesses' (in aggregate with the
cash inflows on disposal of Minerva SA, which were presented
appropriately in this line item). The impact of is to reduce cash
generated from operations by GBP9.2m and increase cash generated
from investing activities by GBP9.2m.
Accounting for Ghanaian Investment Property
In addition, in preparing these Financial Statements, an error
was identified relating to the accounting for investment property
in Ghana. The Group's Ghanaian entity had entered into a historic
contract to exchange the rights to develop 28 properties on land
that the Group owned in return for eight of the properties, once
they had been completed. As this transaction did not involve cash,
the Group had erroneously not recorded any accounting entries in
relation to the recognition of the investment property that was
acquired in this exchange of assets, nor was any of the land, which
had an immaterial cost, derecognised in relation to the 20
properties that were retained by the property developer.
We consider that recognition of an asset in relation to this
contract prior to title in relation to the properties passing to
the Group is not appropriate as there were delays, of a number of
years, in the development of the properties and a legal dispute
over the Group's ownership of the land, which while ultimately
resolved, called into question, until FY20, the probability of the
contract being successfully executed. Therefore, the Group should
have applied the requirements of IAS 40 paragraph 5 and recognised
the investment properties on the balance sheet at their fair value,
being the deemed cost under the Group's cost accounting policy in
respect of investment properties, of GBP5.6m at the point that
title passed to the Group, which was during the year ended 31 May
2020. A corresponding credit to the income statement of GBP5.6m
should also have been recognised at the point of recognition of the
investment properties, as well as a related deferred tax liability
of GBP1.4m and a corresponding tax charge of GBP1.4m. These income
statement amounts have been recognised within adjusting items in
FY20 as they meet the Group's definition of adjusting items, being
material and one-off in nature.
Further, during FY20, one of the eight properties held by the
Group was sold for proceeds of GBP0.5m. Since no book value had
been recorded for these properties, the disposal was recorded at
the proceeds value against other investment properties.
Subsequently no profit or loss was recognised on disposal. Given
the correct accounting described above, this disposal transaction
has been reversed and replaced with the difference between the
proceeds and the revised carrying value of the property, being a
loss on disposal of GBP0.2m. This net loss has been recognised
within operating profit before adjusting items on the basis that it
does not meet the Group's adjusted items policy, being neither
material nor one-off in nature.
All of these adjustments have been recognised as prior year
errors in accordance with IAS 8 'Accounting policies, changes in
accounting estimates and errors' with the Financial Statements
restated accordingly. The impact of the prior year adjustments on
the affected primary statement line items is shown in the table
below:
31 May 2020
GBPm
As Reclassification Reclassification Recognition Disposal As restated
previously between between Cash of of
reported Continuing Generated investment investment
and Discontinued from Operating property property
Operations Activities
and Investing
Activities
------------- ------------- ------------
Consolidated Income Statement
Continuing Operations
Administrative
expenses (104.7) (16.4) - 5.6 (0.2) (115.7)
Operating profit 33.4 (16.4) - 5.6 (0.2) 22.4
Profit before tax 29.3 (16.4) - 5.6 (0.2) 18.3
Taxation (9.7) 1.4 - (1.4) 0.2 (9.5)
Profit/(Loss) from
continuing
operations 19.6 (15.0) - 4.2 - 8.8
(Loss)/Profit from
discontinued
operations (4.1) 15.0 - - - 10.9
Profit attributable
to owners of the
parent 19.3 - - 4.2 - 23.5
Consolidated Cash
Flow
Statement
Cash generated from
operations 137.7 - (9.2) - - 128.5
Net cash generated
from
operating
activities 115.8 - (9.2) - - 106.6
Cash flow from
disposal
of companies &
businesses 35.2 - 9.2 - - 44.4
Net cash generated
from
investing
activities 28.5 - 9.2 - - 37.7
Net
increase/(decrease)
in cash and cash
equivalents 27.2 - - - - 27.2
Balance Sheet
Property plant and equipment 106.9 - - 5.6 (0.2) 112.3
Deferred tax liability (64.4) - - (1.4) 0.2 (65.6)
Current tax payable (47.8) - - - 0.1 (47.7)
Currency reserves (100.6) - - - 0.1 (100.5)
Retained earnings 526.1 - - 4.2 - 530.3
Reserves attributable
to owners of the parent 391.5 - - 4.2 - 395.8
11. Basis of financial statements
This announcement was approved by the Board of Directors on 22
September 2021. The financial information in this announcement does
not constitute the Group's statutory accounts for the year ended 31
May 2021 or 31 May 2020 but it is derived from those accounts.
Statutory accounts for 31 May 2020 have been delivered to the
Registrar of Companies, and those for 31 May 2021 will be delivered
after the Annual General Meeting . The auditors have reported on
those accounts; their reports were unqualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or (3) of the Companies Act 2006.
The audit of the statutory accounts for the year ended 31 May 2021
is not yet complete. These accounts will be finalised on the basis
of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of
Companies following the company's annual general meeting.
The audited consolidated financial statements from which the
2020 results are extracted have been prepared under the historical
cost convention in accordance with IFRS (International Financial
Reporting Standards), as adopted by the EU, IFRS IC interpretations
and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The standards used are those published by the
International Accounting Standards Board (IASB) and endorsed by the
EU and effective at the time of preparing these financial
statements (September 2021).
After making enquiries, the Directors have reasonable
expectations that the Group has adequate resources to continue to
operate for a period of at least 12 months from the date of
approving the financial statements. Accordingly they continue to
adopt the going concern basis in preparing this financial
information.
12. Events after the reporting period
On 4 June 2021, PZ Cussons plc completed the sale of the assets
associated with five:am, which was the Group's yoghurt business in
Australia. On this date, the control of the assets passed to the
acquirer, Barambah Organics. Proceeds for the sale were GBP7.3m and
the profit recognised on disposal was GBP0.9m.
In addition, in the post year end period, foreign exchange
reserves of GBP0.4m charge associated with the brand have been
recycled to the profit and loss account and the related deferred
tax liability has been released (GBP1.8m with associated foreign
exchange reserve of GBP0.6m).
The results of five:am have not been reported within
discontinued operations in the FY21 results as five:am does not
represent a disposal of a major line of business or an exit from a
geographic area of operation as per IFRS 5.
13. Statement of Directors' responsibilities
Each of the Directors confirms that, to the best of their
knowledge:
-- The Financial Statements within the full Annual Report and
Financial Statements from which the financial information within
this preliminary results announcement has been extracted, have been
prepared in accordance with IFRS as adopted by the EU, give a true
and fair view of the assets, liabilities, financial position and
profit of the Company and the undertakings included in the
consolidation taken as a whole; and
-- The basis of preparation, outlook, trading performance
overview and regional reviews include a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that it faces.
Approved by the board of Directors on 22 September 2021.
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
FR FZGZLMMRGMZZ
(END) Dow Jones Newswires
September 22, 2021 02:00 ET (06:00 GMT)
Pz Cussons (LSE:PZC)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Pz Cussons (LSE:PZC)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024