TIDMPZC
RNS Number : 2307P
PZ CUSSONS PLC
08 February 2023
8 February 2023
2023 INTERIM RESULTS
for the half year ended 3 December 2022
Continued profitable like for like revenue growth
FY23 outlook reiterated despite the challenging macro
environment
Jonathan Myers, Chief Executive Officer, said: "Despite the
continued challenging macro environment, we have delivered another
quarter of like for like revenue growth. Our first half performance
has been in line with expectations and we are reiterating our full
year outlook. This is thanks to work we have done to make PZ
Cussons a more resilient business and our focus on building
stronger brands. For example, in the UK, our new brand Cussons
Creations is serving cost-conscious shoppers and the re-launched
Sanctuary Spa is for consumers looking to treat themselves at home
with an everyday indulgence. Overall, while there remains more to
do in our transformation and near-term headwinds to navigate in
some of our markets, we are confident about the opportunities ahead
of us. We are working to build a higher growth, higher margin,
simpler and more sustainable business."
Adjusted Statutory
H1 FY23 H1 FY22 H1 FY23 H1 FY22
---------- ---------- --------- ---------- ---------- -------
Revenue GBP336.9m GBP283.7m 18.8% GBP336.9m GBP283.7m 18.8%
---------- ---------- --------- ---------- ---------- -------
LFL revenue growth 6.1% (2.0)% -
---------- ---------- --------- -------------------------------
Operating profit GBP33.2m GBP32.9m 0.9% GBP39.2m GBP24.4m 60.7%
---------- ---------- --------- ---------- ---------- -------
Operating margin 9.9% 11.6% (170)bps 11.6% 8.6% 300bps
---------- ---------- --------- ---------- ---------- -------
Profit before
tax GBP34.5m GBP32.0m 7.8% GBP40.5m GBP23.5m 72.3%
---------- ---------- --------- ---------- ---------- -------
Basic earnings
per share 5.16p 5.64p (8.5)% 5.90p 4.23p 39.5%
---------- ---------- --------- ---------- ---------- -------
Dividend per share 2.67p 2.67p 0.0%
-------------------- --------------------------------- ---------- ---------- -------
See page 9 for definitions of key terms and pages 10 to 12 for
the reconciliation between Alternative Performance Measures and
Statutory Results.
Numbers are shown based on continuing operations, unless
otherwise stated. With the exception of LFL revenue growth, %
changes are shown at actual FX rates.
Unless otherwise stated H1 FY23 refers to the 6 months ended 3
December 2022 and H1 FY22 refers to the 6 months ended 27 November
2021.
Revenue growth of 18.8% includes approximately three percentage
points contribution due to an additional six reporting days in the
period, compared to H1 FY22.
Group Summary
-- Like for like ('LFL') revenue growth of 6.1%, driven by
price/mix improvements, with limited volume declines
-- Must Win Brands ('MWBs') LFL revenue increased 2.2% (6.7%
growth excluding Carex), with the large majority of the brands in
good growth
-- Reported revenue grew 18.8%, driven by the contribution of
the Childs Farm acquisition, favourable FX and the impact of
additional reporting days in the period
-- Adjusted operating profit margin decline of 170bps in line
with expectations, driven primarily by adverse geographic mix, with
cost mitigation and Revenue Growth Management largely offsetting
underlying inflation. On track for margin improvement in H2
-- Adjusted EPS declined 8.5% as growth in adjusted profit
before tax of 7.8% was more than offset by a higher tax charge and
the increase in minority interests as a result of the improved
profitability in Africa; on a statutory basis, EPS increased 39.5%
to 5.90p
-- Balance sheet remains strong with a new GBP325 million credit
facility agreed, incorporating ESG-linked KPIs
-- Interim dividend of 2.67p, unchanged from H1 FY22
-- Continued progress against 'Building brands for life' strategy, including:
o A doubling of investment in MWBs compared to H1 FY20,
including recent marketing campaigns for Original Source, Sanctuary
Spa and Portfolio Brand Imperial Leather's first TV campaign in
seven years
o Ongoing simplification of our Nigerian operations, with over
GBP30 million of cumulative proceeds now achieved from the sale of
residential properties and an improved ERP infrastructure
o Childs Farm continues to perform well with the ongoing
integration into our own operations and new international listings
recently secured
o Further growth in sustainability-led packaging, including 200%
growth in Sanctuary Spa refill sales which also offer better value
to the consumer
o Incremental investment to prepare selected MWBs for entries
into new markets and adjacencies
-- FY23 outlook and long-term ambition is unchanged from that
provided at the FY22 Results in September 2022
For further information please contact:
Investors
Simon Whittington - IR and Corporate Development Director +44 (0) 77 1137 2928
Media
Headland PZCussons@headlandconsultancy.com +44 (0) 20 3805 4822
Susanna Voyle, Stephen Malthouse, Charlie Twigg
Investor and Analyst conference call
PZ Cussons' management will host an audio webcast for analysts
and institutional investors at 9.00am GMT on 8 February 2023. The
webcast is available at the link below and will also be available
via our corporate website, www.pzcussons.com.
https://www.investis-live.com/pzcussons/63bff148aba36a0c0018e275/fewq
Notes to Editors
About PZ Cussons
PZ Cussons is a FTSE250 listed consumer goods business,
headquartered in Manchester, UK. We employ nearly 3,000 people
across our operations in Europe, North America, Asia-Pacific and
Africa. Since our founding in 1884, we have been creating products
to delight, care for and nourish consumers. Across our core
categories of Hygiene, Baby and Beauty, our trusted and well-loved
brands include Carex, Childs Farm, Cussons Baby, Imperial Leather,
Morning Fresh, Original Source, Premier, Sanctuary Spa and
St.Tropez. Sustainability and the wellbeing of our employees and
communities everywhere are at the heart of our business model and
strategy, and captured by our purpose: For everyone, for life, for
good.
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 PZ Cussons 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 PZ Cussons 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.
Group Review
Introduction from our Chief Executive Officer
Our performance in the first half of the year has continued to
be impacted by a challenging macro environment, with ongoing high
cost inflation and reduced consumer confidence. We have
nevertheless delivered a robust financial performance with
continued LFL revenue growth and our expectations for the full year
are unchanged. Our teams have been working hard to ensure we
continue to offer the best possible value for consumers and I would
like to thank each of them for their efforts and support.
We continue to make good progress against our strategy. We have
refocused on the consumer, raising the bar on how we approach
marketing and innovation. We are investing more to build stronger
brands, with a particular focus on our MWBs where Brand Investment
in the first half of the year is double that of H1 FY20 - just
prior to the launch of the strategy. Finally, we are continuing to
remove the complexities that have historically constrained our
growth.
There is undoubtedly more to do, but significant strategic
progress has been made over the last two years to address our
legacy issues and ensure the business is well positioned to
navigate the near-term headwinds as we continue to move from
Turnaround to Transformation.
Our strategic progress: Building brands for life. Today and for
future generations.
In the first half of the year, we have continued to make good
headway, focusing on the core categories of Hygiene, Baby and
Beauty in our four priority markets of the UK, Australia, Indonesia
and Nigeria.
Build Brands
Our primary strategic focus is on building memorable, trusted
and well-loved brands. In the UK, Sanctuary Spa, one of our MWBs,
was relaunched in the period with new packaging and product ranges,
such as shower oils and scrubs, demonstrating the value offered to
consumers seeking to maintain their everyday indulgences in the
face of the cost of living crisis. Supported by a significant
increase in Brand Investment, results have been positive, with
household penetration increasing by a third and the brand is well
placed to deliver a third consecutive year of strong revenue
growth.
Elsewhere, our continued focus on investing behind MWBs in
Nigeria has resulted in Brand Investment double the level of two
years ago, in part funded by a more than 20% reduction in Portfolio
Brand investment as we shift our resources behind our strategic
priorities. This is driving significant improvement in financial
and operational performance in Africa with LFL revenue growth of
15.6% and a further improved margin.
Serve Consumers
We need to win wherever the shopper shops and we are working to
ensure we have the right route to market strategy for all our
brands, whether through increasing our presence within the
discounter channel or strengthening relationships with the larger
grocers. We are also reaching a wider range of consumers through
innovation, with the development of Cussons Creations providing an
everyday value offering for the cost-conscious shopper.
Building on the earlier success of the Rafferty's Garden online
offering where market share continues to be ahead of traditional
routes to market, the Australian team has recently launched a
Direct-to-Consumer website for Childs Farm, following the move to
integrate previous third party distribution into our own
operations. Elsewhere, St.Tropez had its best 'Holiday Week' ever
in North America driven by targeted promotional programmes and
strong online activity through closer relationships with Amazon. In
the UK, Sanctuary Spa sales grew over 70% as part of Amazon's Prime
Day event.
Reduce Complexity
Nigeria continues to be a major part of our focus to reduce
complexity across the Group. We are simplifying our operations with
further residential property sales, generating GBP13.5 million of
proceeds in the period, bringing cumulative proceeds to over GBP30
million. We see further opportunities to unlock additional value
over time and have also re-engineered our ERP system (SAP) to
improve financial controls and drive process efficiencies.
We have continued to evolve our supply chain footprint. In the
period we relocated our procurement function to improve operational
performance and made the strategic decision to outsource product
fragrance development and supply. Over the medium term we will
continue to reconfigure our supply chain into a simplified, lean
and agile function to support future profitable growth.
Develop People
Our people strategy remains a critical enabler of our business,
building a high engagement, high performance culture. In October we
hosted our first 'Future Ready Summit' which brought together
senior leaders from across the Group to shape our business
priorities and plans. The Workday HR system will bring considerable
benefits to employees and managers whilst driving efficiencies in
process and insight to drive our talent agenda.
Recognising the cost of living challenges many of our employees
are facing, we have been working hard to support wherever we can,
including vouchers in Indonesia, one-off payments in Nigeria and
Ghana and appreciation days in the UK and Australia.
Grow Sustainably
Our investment in sustainability is driven by wanting to be at
the forefront of responding to evolving consumer behaviour and
ensuring that our products serve them well. In the UK, we have
reformulated Imperial Leather bottles and Sanctuary Spa jars to
include 30% post-consumer recycled resin whilst also launching an
Original Source 'bottle for life' made of aluminium and offering
better value to consumers. Sanctuary Spa refills have grown nearly
200% over the past year, reflecting not only consumers' desire to
purchase more sustainably, but also the better value given the
lower levels of plastic usage. Demonstrating our commitment to
embed our new sustainability framework "Better For All" into all
parts of our business, we agreed a new and innovative GBP325
million credit facility which incorporates ESG-linked KPIs.
FY23 Outlook
As previously guided, we expect a stronger operating margin
performance in the second half of the year driven by improved
trends in our Europe and Americas business, more benign cost
inflation and the full impact of price increases implemented part
way through the first half. We remain mindful of significant
macro-economic uncertainty, including the continued depreciation of
the Nigerian naira, but expect to report FY23 adjusted profit
before tax in line with current market estimates.
We now expect an effective tax rate ('ETR') on adjusted profit
before tax for FY23 of 26-27% (22-24% previously) primarily as a
result of the geographic mix of profits. We expect a net interest
charge for FY23 of approximately GBP2 million (versus previous
expectations of GBP4 million).
Our long-term ambition of LFL revenue growth of mid-single
digits and adjusted operating profit margins in the mid-teens is
unchanged.
Financial Review
Overview of Group financial performance
We have delivered a robust financial performance, in line with
our expectations, despite the impact of inflationary pressures and
the softening of the wider macro-economic environment and consumer
confidence. Revenue increased 18.8% reflecting LFL revenue growth
of 6.1%, the positive contribution of the Childs Farm acquisition
and favourable FX movements. An additional six reporting days in
the period added approximately three percentage points to revenue
growth and is excluded from the LFL calculation. LFL revenue was
driven mainly by price/mix improvements of 11.4%. Volumes declined
5.4%, of which nearly three percentage points were attributable to
our Nigerian Electricals business, where we are intentionally
driving price and margin, rather than volume, and to Carex where
category demand has continued to normalise post-Covid. Excluding
the impact of foreign exchange movements, revenue growth was
8.1%.
The 170bps decline in adjusted operating profit margin was
primarily driven by adverse geographic revenue mix as we saw
declines in the higher gross margin brands of Carex and St.Tropez,
but very strong growth in Africa and Australia where our brands
typically have lower margins . Cost inflation remained high in the
period, although this is expected to moderate in the second half of
the year, based on the current market outlook. We have increased
our Brand Investment during the period and have also been investing
in future white space opportunities such as expansion into new
geographies and category adjacencies. Adjusted EPS declined by 8.5%
as a result of the reduction in adjusted operating margin, together
with a higher tax rate and the impact of a higher minority interest
charge associated with the strength of our Nigerian business. O n a
statutory basis, EPS increased 39.5% to 5.90p.
Our balance sheet remains strong, with adjusted net debt of
GBP35.7 million. Adjusted net debt has increased since the year end
as adverse FX movements, loans we elected to advance to PZ Wilmar
Limited, one of our joint ventures in Nigeria, and the payment of
the final FY22 dividend have more than offset free cash flow of
GBP4.2 million (H1 FY22: GBP20.3 million) and proceeds from the
disposal of residential properties in Nigeria. The Board has
approved an unchanged interim dividend of 2.67p (H1 FY22:
2.67p).
Performance by geography
Europe and the Americas
H1 FY23 Reported growth/
(decline)
Revenue GBP99.5m 4.6%
---------- -----------------
LFL revenue growth (6.0)% n/a
---------- -----------------
Adjusted operating
profit GBP9.5m (51.5)%
---------- -----------------
Margin 9.5% (1110)bps
---------- -----------------
Operating profit GBP4.1m (48.8)%
-------------------- ---------- -----------------
Revenue declined 6.0% on a LFL basis, primarily reflecting the
continued post-Covid normalisation of Carex, a strong comparable
period for our Beauty brands and against the context of an 8.3%
decline in the UK washing and bathing category in the period. The
reported revenue increase of 4.6% includes the benefit of the
Childs Farm acquisition, which completed in March 2022. Childs Farm
continues to perform well, benefiting from recently agreed new
international listings and we will soon launch the first new
product development under our ownership.
The UK hand hygiene category declined during the period, driven
largely by a 50% reduction in the hand sanitiser category as
concerns related to Covid have continued to soften. Despite a
reduction in revenue during the period, Carex remains approximately
20% higher than pre-Covid levels and has continued to see strong
performance of refills.
Original Source grew as a result of successful marketing during
the period, helping it to become the third largest shower brand in
the UK, up from fifth previously. After a number of years of
revenue decline, Imperial Leather was relaunched with its first TV
campaign in seven years, reconnecting with the brand's heritage and
appeal to consumers as they seek an everyday indulgence . To enable
Imperial Leather's premiumisation, we launched our new Portfolio
Brand Cussons Creations in June 2022 for the more cost-conscious
consumer, recognising the importance of the discounter retail
channel in recent years. The response to this approach has been
positive, allowing us to both improve profitability and better
serve consumers. The two brands combined have seen higher sales
than the previous Imperial Leather offering.
Our Beauty business saw a decline on last year's particularly
strong performance from St.Tropez which benefited from the Ashley
Graham campaign and a strong post-Covid rebound. Revenue
nevertheless remains significantly higher than two years ago.
Sanctuary Spa grew strongly following its 'Self Care Counts'
re-staging and marketing campaign, with UK household penetration
increasing by a third compared to two years ago. It grew
particularly well on key trading occasions, seeing double and
triple-digit growth during Prime Day and Black Friday respectively
and continues to expand its shower range such as oils and
scrubs.
Adjusted operating profit margin declined to 9.5%, from 20.6%.
This was driven by pressures from cost inflation and the reduction
in consumer confidence in the UK, the revenue decline in Carex and
St.Tropez, as well as incremental investment in the business to
strengthen our portfolio and drive future growth. We expect margins
to improve significantly in H2 due to improved trends in Carex and
St.Tropez, the full period effect of price increases implemented
during H1 and more favourable cost phasing. On a statutory basis,
operating profit declined by GBP3.9 million.
Asia Pacific
H1 FY23 Reported growth/
(decline)
Revenue GBP102.2m 21.1%
----------- -----------------
LFL revenue growth 7.5% n/a
----------- -----------------
Adjusted operating
profit GBP15.4m 41.3%
----------- -----------------
Margin 15.1% 220bps
----------- -----------------
Operating profit GBP15.1m 18.0%
-------------------- ----------- -----------------
Revenue increased 21.1% as a result of strong LFL growth and
favourable FX. On a LFL basis, revenue grew 7.5% driven by very
strong growth in ANZ as a result of successful Revenue Growth
Management activity and share gains, offset by a softer performance
in Indonesia.
Cussons Baby Indonesia declined slightly in the first half due
to the softening of category growth during the period given the
increasing levels of consumer cost inflation. Competition in
certain categories also remain challenging and our focus continues
to be growing the higher margin baby toiletry sub-categories such
as oils, lotions and creams.
In our Hygiene category, Morning Fresh continued to perform
well, maintaining market share despite pricing initiatives. Revenue
was up strongly driven by marketing campaigns in Q1 and Q2 and the
growth of refills with our Bottle for Life offering. Radiant gained
market share, driven by new product development.
Rafferty's Garden continued its strong performance, growing
price and volume ahead of the category, and with a further
acceleration in online sales. Rafferty's Garden remains the clear
market leader, representing almost a third of the baby food
category in Australia.
Imperial Leather performed very strongly driven by our increased
focus on expanding our brands outside of their primary markets.
Adjusted operating margin grew by 220bps as strong revenue
growth and margin initiatives more than offset cost inflation.
Statutory operating profit grew by GBP2.3 million.
Africa
H1 FY23 Reported growth/
(decline)
Revenue GBP133.2m 30.3%
----------- -----------------
LFL revenue growth 15.6% n/a
----------- -----------------
Adjusted operating
profit GBP15.8m 88.1%
----------- -----------------
Margin 11.9% 370bps
----------- -----------------
Operating profit GBP27.5m 172.3%
-------------------- ----------- -----------------
LFL revenue growth of 15.6% was driven by further distribution
gains and improvements in price/mix, with multiple price increases
during the financial year. All major brands, including the
Portfolio Brands Stella and Canoe, reported double digit LFL
revenue growth. Volumes declined only slightly, demonstrating the
strength of our brands and improved distribution. On a reported
basis, revenue grew by 30.3% driven by favourable FX movements.
In our Hygiene business, Premier saw very strong growth as it
continues to lead its category, while we also relaunched our
Flamingo value soap bar with a new proposition and packaging,
targeting the more cost-conscious consumer. Morning Fresh
maintained its market-leading position in the dishwash category in
Nigeria despite significant price increases. Imperial Leather in
Kenya grew strongly, benefiting from new product launches.
Cussons Baby grew strongly, with growth in both price/mix and
volume.
Revenue in our Electricals business continued to grow strongly,
due to a series of price increases to offset cost inflation and
contributed revenue of GBP52.7 million in the period. Gross margins
improved as we continue to prioritise improving the profitability
of the business over gaining volume share.
Adjusted operating margin grew by 370bps. Against a backdrop of
very strong cost inflation, this was achieved through successive
price increases, improving efficiencies, as well as a focus on
driving the higher margin parts of our portfolio. On a statutory
basis, operating profit increased by GBP17.4 million reflecting the
profit on further property disposals in Nigeria.
Other financial items
Operating profit
Adjusted operating profit for the Group was GBP33.2 million,
which compares to GBP32.9 million in the prior period. Adjusted
operating profit margins declined by 170bps to 9.9%. This was
driven primarily by a 270bps reduction in the gross profit margin
which reflects an adverse geographic mix of profits. Overheads
reduced by 50bps as we continue to seek opportunities for
productivity gains. Brand Investment grew versus the prior year in
absolute terms but decreased by 30bps as a percentage of revenue.
PZ Wilmar, our Palm Oil joint venture, reduced the Group's
operating margin by 30bps as its profit declined following the very
strong performance of H1 FY22. Finally, we recognised 50bps of FX
and other gains. Operating profit increased 60.7% to GBP39.2
million.
Adjusting items
Adjusting items in the period totalled net income of GBP6.0
million before tax. This included a net income of GBP10.9 million
from our Nigeria simplification project mainly relating to GBP11.7
million from the profit on the disposal of residential properties.
Other adjusting items mainly related to costs associated with
ongoing transformation programmes and included GBP3.1 million for
the Finance Transformation programme and GBP1.1 million for the
Supply Chain Transformation programme. See note 4 for further
details on adjusting items.
After accounting for these adjusting items, operating profit for
the Group was GBP39.2 million which was GBP14.8 million higher than
the prior period.
Net finance income/(costs)
Net finance income in the period was GBP1.3 million, compared to
a cost of GBP0.9 million in the prior period. This was driven by
several factors, including higher income on cash deposits, the
impact of higher discount rates on pension interest income and
accounting treatment for the RCF refinancing.
Profit before tax was GBP40.5 million, GBP17.0 million higher
than the prior period. Adjusted profit before tax was GBP34.5
million which was GBP2.5 million higher than the prior period.
Taxation
The tax charge in the period for continuing operations was
GBP9.2 million compared to GBP3.6 million in the prior period. The
effective tax rate ('ETR') on adjusted profit before tax increased
to 26.6% (21.6% in the prior period) primarily due to the change in
the geographic mix of profits across the Group.
Profit after tax
Profit for the period from continuing operations was GBP31.3
million, which compared to GBP19.9 million in the prior period.
Basic earnings per share was 5.90p, compared to 4.23p in the prior
period. Adjusted basic earnings per share was 5.16p, which compares
to 5.64p in the prior period. This 8.5% reduction is a result of
the decline in adjusted operating margin, together with a higher
tax rate and the impact of a higher minority interest charge
associated with the growth in our Nigerian business.
The loss from discontinued operations in the prior period was
GBP0.7 million and related to settlement of legal claims relating
to Minerva, a Greek subsidiary which was disposed of in September
2019.
Profit for the period was GBP31.3 million compared to GBP19.2
million in the prior period (which included the GBP0.7 million loss
from discontinued operations described above) .
Balance sheet and cash flow
Adjusted net debt as at 3 December 2022 was GBP35.7 million
which compared to GBP9.8 million at 31 May 2022. This increase is
due to cash outflows related to the payment of the final FY22
dividend and loans we elected to advance to PZ Wilmar Limited, one
of our joint ventures in Nigeria, which more than offset the
proceeds from the disposal of residential properties in Nigeria and
cash generated from operations.
Total free cash flow was GBP4.2 million which included a net
working capital outflow as a result of seasonality of trading which
increases stock and receivables, and a decision made to secure raw
materials in Nigeria ahead of future price increases.
Net assets were GBP430.8 million which compared to GBP449.3
million at 31 May 2022. The reduction was mainly due to the
remeasurement of pension schemes, currency exchange differences on
translation of foreign operations and the FY22 final dividend
partially offset by the profit for the year.
During the period, the Group agreed a new GBP325 million
committed credit facility incorporating both a term loan and
revolving credit facility ( ' RCF ' ) structure, with maturity
dates of up to November 2028. This replaced the previous GBP325
million RCF facility which was due to expire in November 2023. The
facility, which was agreed on attractive commercial terms, includes
a pricing structure linked to the Group's new sustainability
framework.
Dividend
The Board has approved an interim dividend maintained in line
with that of previous years of 2.67p. The dividend will be paid on
6 April 2023 to shareholders on the register at the close of
business on 10 March 2023.
Glossary
Term Definition
---------------------------------------------------------------
Adjusted net Cash, short-term deposits and current asset investments,
debt less bank overdrafts and borrowings. Excludes IFRS 16
lease liabilities
---------------------------------------------------------------
B Corp A B Corp is a company that has been certified by the
non-profit organisation B Lab as meeting rigorous standards
of environmental, social and governance performance,
accountability and transparency.
---------------------------------------------------------------
Brand Investment An operating cost related to brand marketing (previously
'Media & Consumer')
---------------------------------------------------------------
EBITDA Earnings before interest, taxes, depreciation and amortization
---------------------------------------------------------------
Employee wellbeing % score based upon a set of questions within our annual
survey of employees
---------------------------------------------------------------
ETR Effective tax rate
---------------------------------------------------------------
Free cash flow Cash generated from operations less capital expenditure
---------------------------------------------------------------
Free cash flow Free cash flow as a % of adjusted EBITDA from continuing
conversion operations
---------------------------------------------------------------
Like for like Growth on the prior year at constant currency, excluding
('LFL') the impact of disposals and acquisitions, and adjusting
for the number of reporting days in the period
---------------------------------------------------------------
Must Win Brands The brands in which we place greater investment and focus.
They comprise: Carex, Childs Farm (acquired in March
2022), Cussons Baby, Joy, Morning Fresh, Original Source,
Premier, Sanctuary Spa and St.Tropez
---------------------------------------------------------------
Portfolio Brands The brands we operate which are not Must Win Brands
---------------------------------------------------------------
PZ Cussons Growth Our 'repeatable model' for driving commercial execution,
Wheel comprising 'Consumability', 'Attractiveness', 'Shoppability'
and 'Memorability'
---------------------------------------------------------------
Revenue Growth Maximising revenue through ensuring optimised price points
Management ('RGM') across customers and channels and across different product
sizes
---------------------------------------------------------------
SKUs Stock keeping unit
---------------------------------------------------------------
Through the Marketing campaign incorporating both mass reach and
Line targeted activity
-------------------- ---------------------------------------------------------------
Alternative Performance Measures
The Group's business performance is assessed using a number of
Alternative Performance Measures (APMs). These APMs include
adjusted profitability measures where results are presented
excluding separately disclosed items (referred to as adjusting
items) as we believe this provides both management and investors
with useful additional information about the Group's performance
and supports a more effective comparison of the Group's trading
performance from one period to the next.
Adjusted profitability measures are reconciled to IFRS results
on the face of the condensed consolidated income statement with
details of adjusting items provided in note 4 to the condensed
consolidated financial statements. Reconciliations between APMs and
IFRS reported results are set out below:
Adjusted operating profit and adjusted operating margin
(restated*)
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------- ------------ ------------- --------
Group
Operating profit from continuing operations 39.2 24.4 66.6
exclude: adjusting items (6.0) 8.5 1.3
--------------------------------------------- ------------ ------------- --------
Adjusted operating profit 33.2 32.9 67.9
Revenue 336.9 283.7 592.8
Operating margin 11.6% 8.6% 11.2%
Adjusted operating margin 9.9% 11.6% 11.5%
--------------------------------------------- ------------ ------------- --------
By segment
Europe & the Americas:
Operating profit from continuing operations 4.1 8.0 22.9
exclude: adjusting items 5.4 11.6 12.1
--------------------------------------------- ------------ ------------- --------
Adjusted operating profit 9.5 19.6 35.0
Revenue 99.5 95.1 193.0
Operating margin 4.1% 8.4% 11.9%
Adjusted operating margin 9.5% 20.6% 18.1
--------------------------------------------- ------------ ------------- --------
Asia Pacific:
Operating profit from continuing operations 15.1 12.8 37.0
exclude: adjusting items 0.3 (1.9) (16.1)
--------------------------------------------- ------------ ------------- --------
Adjusted operating profit 15.4 10.9 20.9
Revenue 102.2 84.4 173.8
Operating margin 14.8% 15.2% 21.3%
Adjusted operating margin 15.1% 12.9% 12.0%
--------------------------------------------- ------------ ------------- --------
Africa:
Operating profit from continuing operations 27.5 10.1 28.6
exclude: adjusting items (11.7) (1.7) (6.3)
--------------------------------------------- ------------ ------------- --------
Adjusted operating profit 15.8 8.4 22.3
Revenue 133.2 102.2 222.0
Operating margin 20.6% 9.9% 12.9%
Adjusted operating margin 11.9% 8.2% 10.0%
--------------------------------------------- ------------ ------------- --------
Central
Operating loss from continuing operations (7.5) (6.5) (21.9)
exclude: adjusting items - 0.5 11.6
--------------------------------------------- ------------ ------------- --------
Adjusted operating loss (7.5) (6.0) (10.3)
--------------------------------------------- ------------ ------------- --------
* See note 2 to the condensed consolidated financial statements.
Alternative Performance Measures (continued)
Adjusted profit before taxation
(restated*)
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------- ------------ ------------- --------
Profit before taxation from continuing
operations 40.5 23.5 65.3
exclude: adjusting items (6.0) 8.5 1.3
---------------------------------------- ------------ ------------- --------
Adjusted profit before taxation 34.5 32.0 66.6
---------------------------------------- ------------ ------------- --------
* See note 2 to the condensed consolidated financial statements.
Adjusted Earnings Before Interest Depreciation and Amortisation
("Adjusted EBITDA")
(restated*)
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
----------------------------------------------- ------------ ------------- --------
Profit before taxation from continuing
operations 40.5 23.5 65.3
(deduct)/add back: net finance (income)/costs (1.3) 0.9 1.3
add back: depreciation 5.2 6.3 12.8
add back: amortisation 3.1 3.4 6.6
add back: impairment and impairment
reversal 0.1 18.0 9.0
47.6 52.1 95.0
exclude: adjusting items** (6.1) (10.5) (7.7)
----------------------------------------------- ------------ ------------- --------
Adjusted EBITDA 41.5 41.6 87.3
----------------------------------------------- ------------ ------------- --------
* See note 2 to the condensed consolidated financial statements.
** Excludes adjusting items relating to depreciation,
amortisation, impairments and impairment reversals.
Adjusted earnings per share
(restated*)
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
pence pence pence
------------------------------------ ----------- ------------ -------
Total
Basic earnings per share 5.90 4.06 11.59
exclude: adjusting items (0.74) 1.41 0.69
------------------------------------ ----------- ------------ -------
Adjusted basic earnings per share 5.16 5.47 12.28
------------------------------------ ----------- ------------ -------
Diluted earnings per share 5.84 4.04 11.52
exclude: adjusting items (0.73) 1.40 0.69
------------------------------------ ----------- ------------ -------
Adjusted diluted earnings per share 5.11 5.44 12.21
------------------------------------ ----------- ------------ -------
From continuing operations
Basic earnings per share 5.90 4.23 12.02
exclude: adjusting items (0.74) 1.41 0.69
------------------------------------ ------ ---- -----
Adjusted basic earnings per share 5.16 5.64 12.71
------------------------------------ ------ ---- -----
Diluted earnings per share 5.84 4.21 11.95
exclude: adjusting items (0.73) 1.40 0.69
------------------------------------ ------ ---- -----
Adjusted diluted earnings per share 5.11 5.61 12.64
------------------------------------ ------ ---- -----
* See note 2 to the condensed consolidated financial statements.
Alternative Performance Measures (continued)
Adjusted net debt
(restated*)
At At At
3 December 27 November 1 June
2022 2021 2022
GBPm GBPm GBPm
----------------------------------- ------------ ------------- --------
Cash at bank and in hand 118.6 107.9 105.8
Short-term deposits 77.2 1.7 58.0
Overdrafts - (0.1) (0.1)
Cash and cash equivalents 195.8 109.5 163.7
Current asset investments 0.5 0.3 0.5
Non-current borrowings (232.0) (106.0) (174.0)
----------------------------------- ------------ ------------- --------
Adjusted net (debt)/cash and cash
equivalents (35.7) 3.8 (9.8)
----------------------------------- ------------ ------------- --------
* See note 2 to the condensed consolidated financial statements.
Free cash flow
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
------------------------------------- ------------ ------------- --------
Cash generated from operations 7.0 25.0 66.2
deduct: purchase of property, plant
and equipment and software (2.8) (4.7) (8.2)
Free cash flow 4.2 20.3 58.0
------------------------------------- ------------ ------------- --------
CONDENSED CONSOLIDATED INCOME STATEMENT
(restated*)
Unaudited Unaudited Audited
Half year to Half year to Year to
3 December 2022 27 November 2021 31 May 2022
Business Business Business
performance Adjusting Statutory performance Adjusting Statutory performance Adjusting Statutory
excluding items results excluding items results excluding items results
adjusting (note for the adjusting (note for the adjusting (note for the
items 4) half year items 4) half year items 4) full year
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Continuing operations
Revenue 3 336.9 - 336.9 283.7 - 283.7 592.8 - 592.8
Cost of sales (215.6) - (215.6) (173.8) - (173.8) (365.3) - (365.3)
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Gross profit 121.3 - 121.3 109.9 - 109.9 227.5 - 227.5
Selling and distribution
costs (55.1) - (55.1) (44.5) - (44.5) (90.3) - (90.3)
Administrative expenses (36.7) 6.0 (30.7) (36.6) (8.5) (45.1) (75.9) (1.3) (77.2)
Share of results of
joint ventures 3.7 - 3.7 4.1 - 4.1 6.6 - 6.6
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Operating profit 3 33.2 6.0 39.2 32.9 (8.5) 24.4 67.9 (1.3) 66.6
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Finance income 4.9 - 4.9 0.7 - 0.7 2.7 - 2.7
Finance costs (3.6) - (3.6) (1.6) - (1.6) (4.0) - (4.0)
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Net finance income/(costs) 5 1.3 - 1.3 (0.9) - (0.9) (1.3) - (1.3)
------------ ----------- ----------- ------------ ----------- ----------
Profit before taxation 34.5 6.0 40.5 32.0 (8.5) 23.5 66.6 (1.3) 65.3
Taxation 7 (9.1) (0.1) (9.2) (6.9) 3.3 (3.6) (13.0) (0.3) (13.3)
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Profit for the period/year
from continuing operations 25.4 5.9 31.3 25.1 (5.2) 19.9 53.6 (1.6) 52.0
Discontinued operations
Loss from discontinued
operations - - - (0.7) - (0.7) (1.8) - (1.8)
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Profit for the period/year 25.4 5.9 31.3 24.4 (5.2) 19.2 51.8 (1.6) 50.2
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
Attributable to:
Owners of the Parent 21.6 3.1 24.7 22.9 (5.9) 17.0 51.4 (2.9) 48.5
Non-controlling interests 3.8 2.8 6.6 1.5 0.7 2.2 0.4 1.3 1.7
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
25.4 5.9 31.3 24.4 (5.2) 19.2 51.8 (1.6) 50.2
---------------- ----------- ---------- ------------ ----------- ----------- ------------ ----------- ----------
From continuing operations:
Basic EPS (pence) 9 5.16 0.74 5.90 5.64 (1.41) 4.23 12.71 (0.69) 12.02
Diluted EPS (pence) 9 5.11 0.73 5.84 5.61 (1.40) 4.21 12.64 (0.69) 11.95
From continuing and discontinued
operations:
Basic EPS (pence) 9 5.16 0.74 5.90 5.47 (1.41) 4.06 12.28 (0.69) 11.59
Diluted EPS (pence) 9 5.11 0.73 5.84 5.44 (1.40) 4.04 12.21 (0.69) 11.52
* Results for the half year to 27 November 2021 have been restated. Further details are set out in
note 2.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
Notes GBPm GBPm GBPm
------------ ------------- ---------
Profit for the period/year 31.3 19.2 50.2
Other comprehensive (expense)/income
Items that will not be reclassified
to profit or loss
Re-measurement (loss)/gain on
post-employment obligations 12 (33.2) 11.8 37.4
Deferred tax credit/(charge) on
re-measurement of post-employment
benefit obligations 8.1 (2.2) (8.4)
Total items that will not be
reclassified to profit or loss (25.1) 9.6 29.0
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translation
of foreign operations (10.6) 7.7 21.7
Cash flow hedges - net movement
in period/year 0.3 0.7 0.2
Cost of hedging reserve - 0.1 -
Recycle of foreign exchange equity
reserves on repayment of quasi-equity
loans - 1.5 (1.4)
Deferred tax on repayment of quasi-equity
loans - - (1.3)
Recycle of foreign exchange equity
reserves on disposals - (0.2) (0.2)
Recycle of equity reserves on
disposal of subsidiary - 0.3 0.3
------------ ------------- ---------
Total items that may be subsequently
reclassified to profit or loss (10.3) 10.1 19.3
Other comprehensive (expense)/income
for the period/year (35.4) 19.7 48.3
------------ ------------- ---------
Total comprehensive (expense)/income
for the period/year (4.1) 38.9 98.5
------------ ------------- ---------
Attributable to:
Owners of the Parent (9.7) 35.4 94.9
Non-controlling interests 5.6 3.5 3.6
------------ ------------- ---------
(4.1) 38.9 98.5
------------ ------------- ---------
* Results for the half year to 27 November 2021 have been
restated. Further details are set out in note 2.
CONDENSED CONSOLIDATED BALANCE SHEET
(restated*)
Unaudited Unaudited Audited
3 December 27 November 31 May
2022 2021 2022
Notes GBPm GBPm GBPm
------------ ------------- --------
Assets
Non-current assets
Goodwill and other intangible assets 6 330.6 273.6 333.3
Property, plant and equipment 6 77.0 85.3 82.9
Right-of-use assets 15 14.2 11.3 16.9
Net investments in joint ventures 49.0 40.7 45.4
Deferred taxation assets 4.0 5.9 4.5
Tax receivable - 1.7 1.2
Retirement benefit surplus 12 36.4 45.9 69.3
------------ ------------- --------
511.2 464.4 553.5
------------ ------------- --------
Current assets
Inventories 130.9 109.2 111.8
Trade and other receivables 127.5 130.1 105.0
Derivative financial assets 13 3.9 1.2 0.7
Current tax receivable 2.5 15.5 2.6
Current asset investments 11 0.5 0.3 0.5
Cash and short-term deposits 11 195.8 109.6 163.8
------------ ------------- --------
461.1 365.9 384.4
------------ ------------- --------
Assets held for sale 1.6 0.7 3.4
------------ ------------- --------
462.7 366.6 387.8
------------ ------------- --------
Total assets 973.9 831.0 941.3
------------ ------------- --------
Equity and liabilities
Equity
Share capital 4.3 4.3 4.3
Capital redemption reserve 0.7 0.7 0.7
Hedging reserve 0.1 0.4 (0.2)
Currency translation reserve (78.8) (79.7) (69.2)
Other reserves (35.9) (37.1) (37.1)
Retained earnings 509.6 487.2 525.6
------------ ------------- --------
Attributable to owners of the
Parent 400.0 375.8 424.1
Non-controlling interests 30.8 22.3 25.2
------------ ------------- --------
Total equity 430.8 398.1 449.3
------------ ------------- --------
Liabilities
Non-current liabilities
Borrowings 11 232.0 106.0 174.0
Other payables 5.2 0.5 4.5
Lease liabilities 15 11.9 7.5 14.0
Deferred taxation liabilities 81.6 71.0 90.7
Retirement and other long-term employee
benefit obligations 12 11.9 14.0 13.1
------------ ------------- --------
342.6 199.0 296.3
------------ ------------- --------
Current liabilities
Borrowings 11 - 0.1 0.1
Trade and other payables 175.2 171.4 163.9
Lease liabilities 15 2.1 3.7 2.9
Dividends payable - 14.3 -
Derivative financial liabilities 13 0.5 1.1 1.6
Current taxation payable 21.2 37.6 21.6
Provisions 1.5 5.7 5.6
------------ ------------- --------
200.5 233.9 195.7
Total liabilities 543.1 432.9 492.0
------------ ------------- --------
Total equity and liabilities 973.9 831.0 941.3
------------ ------------- --------
* Results for the half year to 27 November 2021 have been
restated. Further details are set out in note 2.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Parent
-------------------------------------------------------
Capital Currency Non
Share redemption Hedging translation Other Retained controlling Total
capital reserve reserve reserve reserves Earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 1 June 2021 (as
reported in 27
November 2021
financial
statements) 4.3 0.7 (0.4) (87.4) (39.1) 483.7 361.8 20.0 381.8
Prior year
adjustments (note
2) - - - - - (9.1) (9.1) (1.2) (10.3)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 1 June 2021 (as
restated and
reported
in the 31 May
2022 financial
statements) 4.3 0.7 (0.4) (87.4) (39.1) 474.6 352.7 18.8 371.5
Profit for the
period (as
previously
reported) - - - - - 25.7 25.7 2.2 27.9
Prior period
adjustment (note
2) - - - - - (8.7) (8.7) - (8.7)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Profit for the
period (as
restated) - - - - - 17.0 17.0 2.2 19.2
Other
comprehensive
income for the
period - - 0.8 7.7 - 9.9 18.4 1.3 19.7
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total
comprehensive
income for the
period (as
restated) - - 0.8 7.7 - 26.9 35.4 3.5 38.9
Transactions with
owners:
Ordinary dividends - - - - - (14.3) (14.3) - (14.3)
Share-based
payments - - - - 2.0 - 2.0 - 2.0
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total transactions
with owners
recognised
directly in
equity - - - - 2.0 (14.3) (12.3) - (12.3)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 27 November
2021 (restated)* 4.3 0.7 0.4 (79.7) (37.1) 487.2 375.8 22.3 398.1
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 1 June 2021 (as
restated and
reported
in the 31 May
2022 financial
statements) 4.3 0.7 (0.4) (87.4) (39.1) 474.6 352.7 18.8 371.5
Profit for the
year - - - - - 48.5 48.5 1.7 50.2
Other
comprehensive
income for the
year - - 0.2 18.2 - 28.0 46.4 1.9 48.3
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total
comprehensive
income for the
year - - 0.2 18.2 - 76.5 94.9 3.6 98.5
Transactions with
owners:
Ordinary dividends - - - - - (25.5) (25.5) - (25.5)
Share-based
payments - - - - 2.0 - 2.0 - 2.0
Non-controlling
interests
dividend
paid - - - - - - - (0.5) (0.5)
Sale of
non-controlling
interests - - - - - - - 3.3 3.3
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total transactions
with owners
recognised
directly in
equity - - - - 2.0 (25.5) (23.5) 2.8 (20.7)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 31 May 2022 4.3 0.7 (0.2) (69.2) (37.1) 525.6 424.1 25.2 449.3
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 1 June 2022 4.3 0.7 (0.2) (69.2) (37.1) 525.6 424.1 25.2 449.3
Profit for the
period - - - - - 24.7 24.7 6.6 31.3
Other
comprehensive
(expense)/income
for the period - - 0.3 (9.6) - (25.1) (34.4) (1.0) (35.4)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total
comprehensive
(expense)/income
for the period - - 0.3 (9.6) - (0.4) (9.7) 5.6 (4.1)
Transactions with
owners:
Ordinary dividends - - - - - (15.6) (15.6) - (15.6)
Share-based
payments - - - - 1.2 - 1.2 - 1.2
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
Total transactions
with owners
recognised
directly in
equity - - - - 1.2 (15.6) (14.4) - (14.4)
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
At 3 December 2022 4.3 0.7 0.1 (78.8) (35.9) 509.6 400.0 30.8 430.8
-------- ------------ --------- ----------- --------- --------- -------- ----------- ---------
* Results for the half year to 27 November 2021 have been
restated. Further details are set out in note 2.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
Notes GBPm GBPm GBPm
------------ ------------- ---------
Cash flows from operating activities
Cash generated from operations 10 7.0 25.0 66.2
Taxation paid (8.4) (5.9) (12.3)
Interest paid (3.4) (1.4) (3.5)
------------ ------------- ---------
Net cash (used in)/generated
from operating activities (4.8) 17.7 50.4
------------ ------------- ---------
Cash flows from investing activities
Interest received 4.9 0.7 2.6
Investment income - - 0.1
Purchase of property, plant and
equipment and software (2.8) (4.7) (8.2)
Proceeds from sale of property,
plant and equipment 13.5 12.6 18.6
Cash flow from disposal of businesses - 6.4 7.2
Resolution of purchase price from
disposal of company - - (0.8)
Acquisition of subsidiary - - (33.6)
Loans (advanced to)/repaid by
joint ventures (11.4) 1.8 8.4
Net cash generated from/(used
in) investing activities 4.2 16.8 (5.7)
------------ ------------- ---------
Cash flows from financing activities
Dividends paid to non-controlling
interests (0.2) - (0.5)
Dividends paid to Company shareholders 8 (15.6) - (25.5)
Proceeds from loans by joint ventures - - 0.6
Repayment of lease liabilities 15 (1.6) (1.9) (4.0)
Proceeds from loan facility 11 263.0 - 56.0
Repayment of loan facility 11 (205.0) (12.0) -
------------ ------------- ---------
Net cash generated from/(used
in) financing activities 40.6 (13.9) 26.6
------------ ------------- ---------
Net increase in cash and cash
equivalents 11 40.0 20.6 71.3
Effect of foreign exchange rates 11 (7.9) 1.9 5.4
Cash and cash equivalents at the
beginning of the period/year 11 163.7 87.0 87.0
------------ ------------- ---------
Cash and cash equivalents at the
end of the period/year 11 195.8 109.5 163.7
------------ ------------- ---------
* Results for the half year to 27 November 2021 have been
restated. Further details are set out in note 2.
Notes to the condensed consolidated 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
36.
The Group reports results as at the Saturday closest to 30
November. The comparative interim reporting date was previously
shown as being 30 November 2021 but has now been more accurately
labelled as being 27 November 2021. Aside from the restatements
described in note 2, the results and position of the Group
previously presented remain unchanged, since the amounts previously
presented were at 27 November 2021. Unless otherwise stated H1 FY23
refers to the period from 1 June 2022 to 3 December 2022 and H1
FY22 refers to the period from 1 June 2021 to 27 November 2021.
These condensed consolidated interim financial statements for the
half year ended 3 December 2022, 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 UK. The condensed consolidated interim financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 May 2022 which have been prepared in
accordance with UK-adopted International Accounting Standards
("IAS") as issued by the International Accounting Standards Board
("IASB") and interpretations issued by the International Financial
Reporting Standard Interpretations Committee ("IFRIC").
The condensed consolidated interim financial statements for the
half year ended 3 December 2022 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 2022 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 28 September 2022 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 7 February 2023.
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 consolidated financial statements for the year ended 31 May
2022 which are described in note 1(d) of the 2022 Annual Report and
Financial Statements with the addition of the following:
Assessment of impairment of goodwill and other indefinite life
assets - Goodwill and brands have all arisen from previous business
combinations and all have indefinite useful lives and, in
accordance with IAS 36 'Impairment of Assets', are subject to
annual impairment testing at the year end date, or more frequent
testing if there are indicators of impairment. The method used for
impairment testing is to allocate assets (including goodwill and
brands) to appropriate cash-generating units (CGUs) based on the
smallest identifiable group of assets that generate independent
cash inflows, and to estimate the recoverable amounts of the CGUs
as the higher of an asset's fair value less costs of disposal and
its value in use. Value in use is determined using 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 applicable to the markets and
geographies in which the CGUs operate. The cash flow projections
are discounted based on a pre-tax weighted average cost of capital
for comparable companies operating in similar markets and
geographies as the Group adjusted for risks specific to the
particular CGU. During the period, management considered whether
there were any indicators of impairment or impairment reversal
which would require a detailed impairment test to be performed, and
concluded that there was an indicator of impairment in relation to
the carrying value of
each of the brands within the Sanctuary Spa CGU and the Childs
Farm CGU. As a result, an impairment test was performed for each
CGU, and the estimates used in the tests are described and set out
in note 6.
2. Accounting policies
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. The accounting policies
are consistent with those of the annual financial statements for
the year ended 31 May 2022. Taxes on income in the interim periods
are accrued using the tax rate that would be applicable to the
expected total annual profit or loss before taxation.
The Group has not applied any new standards and amendments in
the reporting period commencing 1 June 2022. Certain new accounting
standards and interpretations have been published that are not
mandatory for the current reporting period and the Group has chosen
not to early adopt any of these where early adoption is permitted.
The Group will undertake an assessment of the impact of these new
standards and interpretations in due course.
Restatements
As set out in the 2022 Annual Report and Financial Statements,
during the year ended 31 May 2022 management identified a number of
errors relating to prior periods. Accordingly, prior year
adjustments were made which are summarised below and for which
further details are provided in note 1(c) of the 2022 Annual Report
and Financial Statements.
Intangible asset impairment
Management reviewed the evidence supporting the Group's
judgements around cash generating units ("CGU") identification and
concluded that the Charles Worthington business should always have
been treated as a separate CGU. Following this determination,
management performed an impairment review over the identifiable
assets and liabilities of the Charles Worthington CGU at each of 31
May 2020 and 31 May 2021. These reviews identified that the
carrying value of the brand within intangible assets should be
impaired by GBP16.9 million at 31 May 2020 (with a related GBP3.2
million deferred tax credit), and that GBP8.3 million of this
impairment had reversed at 31 May 2021 (with a related GBP1.1
million deferred tax charge).
For the interim financial statements ended 27 November 2021 as
at that point, management had not concluded that the Charles
Worthington business should always have been treated as a separate
CGU. If management had done so, it would have identified an
indicator of impairment and subsequently carried out a full
impairment test in line with IAS 36; this would have resulted in an
impairment charge of GBP11.6 million (with a related GBP2.9 million
deferred tax credit). This impairment charge has already been
recorded within the financial statements for the year ended 31 May
2022 as the impairment tests were carried out at that time in
relation to the change in the judgements around CGUs.
Indirect tax liability
Management identified an indirect tax liability of a subsidiary
which should have previously been recognised in the financial
statements. In line with IAS 37 'Provisions, Contingent Liabilities
and Contingent Assets', management considered it appropriate to
recognise a provision of GBP4.9 million at 31 May 2021 in relation
to this liability, with a corresponding current tax receivable of
GBP1.1 million recognised as a portion of the liability is tax
deductible. A resulting reduction in retained earnings and
non-controlling interest was made for the net value of GBP3.8
million. The non-controlling interest in this net adjustment was
GBP1.2 million.
Dividend
Management identified that the liability at 27 November 2021 for
the final dividend totalling GBP14.3 million for the year ended 31
May 2021 had been incorrectly derecognised in advance of receipt of
the cash by the shareholders on 30 November 2021. T herefore at 27
November 2021, cash of GBP14.3 million has now been recorded,
together with a liability to shareholders of the same amount.
2. Accounting policies (continued)
Restatements (continued)
The impacts of these prior year adjustments on the previously
reported condensed consolidated balance sheet, condensed
consolidated income statement and condensed consolidated cash flow
statement at and for the half year ended 27 November 2021 is set
out in the following table. The impact on the consolidated balance
sheet at 31 May 2021 was reported in the 2022 Annual Report and
Financial Statements.
relating to
half year ended
relating to prior to 1 27 November
June 2021 2021
------------------------------
Charles
As Worthington Indirect Charles
previously impairment tax Worthington As
reported and reversal liability Total impairment Dividend restated
FY20 FY21
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ------- ----------------
Consolidated
balance sheet
Goodwill and other
intangible assets 293.8 (16.9) 8.3 - (8.6) (11.6) - 273.6
Current tax receivable 14.4 - - 1.1 1.1 - - 15.5
Retained earnings 505.0 (13.7) 7.2 (2.6) (9.1) (8.7) - 487.2
Non-controlling
interests 23.5 - - (1.2) (1.2) - - 22.3
Deferred taxation
liabilities (76.0) 3.2 (1.1) - 2.1 2.9 - (71.0)
Provisions (0.8) - - (4.9) (4.9) - - (5.7)
Dividends payable - - - - - - (14.3) (14.3)
Cash and short-term
deposits 95.3 - - - - - 14.3 109.6
----------------------------- ----------- ------- ------ ----------- ------ ------------ --------- ------------
Consolidated
income statement
Administrative
expenses (33.5) - - - - (11.6) - (45.1)
Operating profit 36.0 - - - - (11.6) - 24.4
Profit before
taxation 35.1 - - - - (11.6) - 23.5
Taxation (6.5) - - - - 2.9 - (3.6)
Profit for the
period from continuing
operations 28.6 - - - - (8.7) - 19.9
Profit for the
period 27.9 - - - - (8.7) - 19.2
Attributable to:
Owners of the
Parent 25.7 - - - - (8.7) - 17.0
Earnings per share
- basic:
* total 6.14 - - - - (2.08) - 4.06
* continuing operations 6.31 - - - - (2.08) - 4.23
Earnings per share
- diluted:
* total 6.11 - - - - (2.07) - 4.04
* continuing operations 6.28 - - - - (2.07) - 4.21
----------------------------- ----------- ------- ------ ----------- ------ ------------ --------- ------------
Consolidated
cash flow statement
Dividends paid
to Company shareholders (14.3) - - - - - 14.3 -
Net cash used
financing activities (28.2) - - - - - 14.3 (13.9)
Net increase in
cash and cash
equivalents 6.3 - - - - - 14.3 20.6
Cash and cash
equivalents at
the end of the
period 95.2 - - - - - 14.3 109.5
----------------------------- ----------- ------- ------ ----------- ------ ------------ --------- ------------
3. Segmental analysis
The segmental information presented in this 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 of 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 on an arm's length basis.
Reporting used by the CODM to assess performance does contain
information about brand specific performance, however global
segmentation between the portfolio of brands is not part of the
regular internally reported financial information.
Business segments
Half year to 3 December Europe
2022 & Asia
the Americas Pacific Africa Central Elimin-ations Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ----------------- --------- --------- ---------- -------------- --------
Gross segment revenue 101.9 105.7 133.2 44.9 (48.8) 336.9
Inter segment revenue (2.4) (3.5) - (42.9) 48.8 -
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Revenue 99.5 102.2 133.2 2.0 - 336.9
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items and
share of results of joint
ventures 9.5 15.4 12.1 (7.5) - 29.5
Share of results of joint
ventures - - 3.7 - - 3.7
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items 9.5 15.4 15.8 (7.5) - 33.2
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Adjusting Items (5.4) (0.3) 11.7 - - 6.0
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit 4.1 15.1 27.5 (7.5) - 39.2
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Finance income 4.9
Finance cost (3.6)
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Profit before taxation 40.5
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Half year to 27 November Europe
2021 & Asia
(restated - see note 2) the Americas Pacific Africa Central Elimin-ations Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ----------------- --------- --------- ---------- -------------- --------
Gross segment revenue 97.0 86.8 102.2 40.5 (42.8) 283.7
Inter segment revenue (1.9) (2.4) - (38.5) 42.8 -
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Revenue 95.1 84.4 102.2 2.0 - 283.7
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items and
share of results of joint
ventures 19.6 10.9 4.3 (6.0) - 28.8
Share of results of joint
ventures - - 4.1 - - 4.1
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items 19.6 10.9 8.4 (6.0) - 32.9
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Adjusting Items (11.6) 1.9 1.7 (0.5) - (8.5)
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit 8.0 12.8 10.1 (6.5) - 24.4
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Finance income 0.7
Finance cost (1.6)
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Profit before taxation 23.5
------------------------------------ ---------- --------- --------- ---------- -------------- --------
3. Segmental analysis (continued)
Year to 31 May 2022 Europe
& Asia
the Americas Pacific Africa Central Elimin-ations Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ----------------- --------- --------- ---------- -------------- --------
Gross segment revenue 196.3 179.2 222.0 77.3 (82.0) 592.8
Inter segment revenue (3.3) (5.4) - (73.3) 82.0 -
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Revenue 193.0 173.8 222.0 4.0 - 592.8
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items and
share of results of joint
ventures 35.0 20.9 15.7 (10.3) - 61.3
Share of results of joint
ventures - - 6.6 - - 6.6
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit
before adjusting items 35.0 20.9 22.3 (10.3) - 67.9
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Adjusting Items (12.1) 16.1 6.3 (11.6) - (1.3)
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Segmental operating profit 22.9 37.0 28.6 (21.9) - 66.6
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Finance income 2.7
Finance cost (4.0)
------------------------------------ ---------- --------- --------- ---------- -------------- --------
Profit before taxation 65.3
------------------------------------ ---------- --------- --------- ---------- -------------- --------
The Group analyses its net revenue by the following
categories:
Unaudited Unaudited Audited
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
------------- ------------ ------------- --------
Hygiene 174.0 147.4 305.9
Baby 66.1 50.1 103.4
Beauty 40.2 38.6 80.9
Electricals 52.7 42.8 91.5
Other 3.9 4.8 11.1
------------- ------------ ------------- --------
336.9 283.7 592.8
------------- ------------ ------------- --------
4. Adjusting items
Adjusting items income/(expense), all of which were within
continuing operations, comprised:
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------------- ------------- ------------ --------
Nigeria Simplification 10.9 3.8 7.8
HR Transformation (0.5) - (2.9)
Finance Transformation (3.1) - (0.7)
Supply Chain Transformation (1.1) - (0.7)
Childs Farm acquisition (0.2) - (1.4)
Compensation from Australian Competition
& Consumer Commission - 1.5 1.5
Profit on disposal of five:am - 0.8 0.7
Derecognition of capitalized costs related
to cloud computing arrangements - (1.5) (1.0)
Intangible asset impairment net of impairment
reversal - (11.6) (3.1)
Recycling of foreign exchange on quasi-equity
loans - (1.5) (1.5)
Adjusting items before taxation 6.0 (8.5) (1.3)
Taxation (0.1) 3.3 (0.3)
---------------------------------------------- ------------- ------------ --------
Adjusting items after taxation 5.9 (5.2) (1.6)
---------------------------------------------- ------------- ------------ --------
* See note 2.
4. Adjusting items (continued)
A description of the principal adjusting items is provided
below:
Nigeria Simplification - in the half year to 3 December 2022,
comprises GBP11.7 million from the profit on disposal of a number
of residential properties (half year to 27 November 2021: GBP11.2
million profit; year to 31 May 2022: GBP15.9 million profit), and
other costs of GBP0.8 million (half year to 27 November 2021:
GBP7.4 million; year to 31 May 2022: GBP8.1 million profit) which,
in the period, relate to consultancy costs related to the
simplification programme.
HR Transformation - t he programme centres around investment in
a new people system designed to enhance ways of working, build
organisational capability and underpin our new culture, reduce
organisational risk and embed better controls and drive process
efficiency. This two-year programme of change is split into two
phases, the latter being delivered in the current financial year,
which will enable PZ Cussons to transform and realise all the
benefits. The programme is expected to complete within this
financial year with total expected costs in the year of
approximately GBP1 million.
Finance Transformation - this project is a three-year programme
of change covering investment in a future finance operating model
and improving capability, processes and controls. As well as
ensuring we are ready for compliance deadlines with future
corporate reform in Nigeria and the UK (ICFR or "UK SOx" as part of
the proposed BEIS corporate reform), it will also improve the
overall control environment at PZC, with the right set of processes
and systems and a strengthened financial control team. It will
deliver an optimal Finance Shared Service Centre footprint, and
address the legacy finance process and systems issues associated
with our SAP ERP system. Total costs of approximately GBP9 million
are expected to be incurred in this financial year, and the total
programme is expected to incur up to a further GBP5 million in the
following financial year.
Supply Chain Transformation - this multi-year programme is
designed to respond to the longer-term business strategy of the
organisation, its objectives being to align and improve supply
chain capabilities and drive activities that will dramatically
reduce business complexity. It focuses on leading brands for
priority markets and outsourcing manufacturing that is no longer
economically viable. It enhances capabilities where there is scale
and strategic advantage in terms of formulation or manufacturing or
where there are geographical benefits. Total costs of approximately
GBP5 million are expected to be incurred in this financial year
with a total programme spend, including capital expenditure, of
approximately GBP25 million over the 5 year programme
lifecycle.
Childs Farm Acquisition - in March 2022, in the previous
financial year, the Group acquired Childs Farm. Related to the
acquisition, the Group has incurred legal and advisory fees which
were reported in the previous financial year and has additionally
further incurred costs related to the integration of the business
into the Group. Total costs of approximately GBP0.5 million are
expected to be incurred in this financial year.
The following items relate solely to the previous financial
year:
Compensation from Australian Competition & Consumer
Commission - being a receipt in the prior period from the
Australian Competition & Consumer Commission as compensation
towards legal costs incurred by the Group in a successful defence
of a legal case related to competition in the laundry market in
Australia dating from 2008-2009.
Profit on disposal of five:am - on 4 June 2021, the Group
completed the sale of the assets associated with five:am, which was
the Group's yoghurt business in Australia, for GBP7.2 million. The
GBP0.8 million pre-tax profit recognised on disposal was net of
GBP0.4 million of accumulated foreign exchange losses recycled from
equity. On a post-tax basis the profit was GBP2.5 million which
included the release of a GBP1.2 million deferred tax liability in
relation to the disposed brand.
Derecognition of capitalised costs related to cloud computing
arrangements - following the April 2021 IFRIC agenda decision in
relation to this matter, the Group reviewed its costs capitalised
in respect of cloud computing arrangements and determined that they
did not meet the criteria for capitalisation, and accordingly
derecognised and expensed these.
Intangible asset impairment net of impairment reversal -
comprises an GBP11.6 million impairment of the Charles Worthington
brand and an GBP8.5 million reversal of a prior period impairment
of the Rafferty's Garden brand, the latter resulting from a review
of future growth assumptions used in the annual impairment
test.
5. Net finance income/(costs)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
----------------------------------------------- ------------ ------------- ---------
Interest receivable on cash deposits 3.4 0.3 1.7
Interest receivable on loans to joint
ventures 0.4 0.2 0.4
Interest receivable on defined benefit
pension scheme 1.1 0.2 0.6
Finance income 4.9 0.7 2.7
Interest payable on bank loans and overdrafts (3.0) (0.9) (2.5)
Interest payable to external third parties (0.2) (0.2) -
Interest payable on defined benefit pension
scheme - - (0.6)
Interest expense on lease liabilities (0.2) (0.2) (0.5)
Amortisation of financing fees (0.2) (0.3) (0.4)
----------------------------------------------- ------------ ------------- ---------
Finance costs (3.6) (1.6) (4.0)
----------------------------------------------- ------------ ------------- ---------
Net finance income/(costs) 1.3 (0.9) (1.3)
----------------------------------------------- ------------ ------------- ---------
6. Goodwill and other intangibles assets and property, plant and equipment
(restated*)
Goodwill
and other Property,
intangible plant
assets and equipment
GBPm GBPm
----------------------------------------------- ------------ ---------------
At 1 June 2021 288.9 91.5
Additions 1.3 3.4
Disposals - (1.5)
Transfer between asset classification 0.1 (0.1)
Depreciation - (4.6)
Amortisation (3.4) -
Impairment (11.6) (6.4)
Derecognition of capitalised costs related to
cloud computing arrangements (note 4) (1.5) -
Currency retranslation (0.2) 3.0
----------------------------------------------- ------------ ---------------
At 27 November 2021 273.6 85.3
----------------------------------------------- ------------ ---------------
At 1 June 2022 333.3 82.9
Additions 1.1 1.7
Disposals - (1.2)
Transfers between asset classification (0.6) 0.6
Depreciation - (3.8)
Amortisation (3.1) -
Impairment (0.1) -
Currency retranslation - (3.2)
---------------------------------------- ------ ------
At 3 December 2022 330.6 77.0
---------------------------------------- ------ ------
* See note 2.
Goodwill and other intangible assets comprise goodwill of
GBP60.3 million (31 May 2022: GBP60.4 million), software of GBP24.5
million (31 May 2022: GBP27.1 million), the majority of which
relates to the implementation and associated costs of the SAP
project, and brands of GBP245.8 million (31 May 2022: GBP245.8
million).
6. Goodwill and other intangibles assets and property, plant and equipment (continued)
Goodwill and brands have all arisen from previous business
combinations and all have indefinite useful lives and, in
accordance with IAS 36 'Impairment of Assets', are subject to
annual impairment testing at the year end date, or more frequent
testing if there are indicators of impairment. The method used for
impairment testing is to allocate assets (including goodwill and
brands) to appropriate cash-generating units (CGUs) based on the
smallest identifiable group of assets that generate independent
cash inflows, and to estimate the recoverable amounts of the CGUs
as the higher of an asset's fair value less costs of disposal and
its value in use. Value in use is determined using 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 applicable to the markets and
geographies in which the CGUs operate. The cash flow projections
are discounted based on a pre-tax weighted average cost of capital
for comparable companies operating in similar markets and
geographies as the Group adjusted for risks specific to the
particular CGU.
The Group considered whether there were any indicators of
impairment or impairment reversal during the period which would
require a detailed impairment test to be performed, and management
concluded that there was an indicator of impairment in relation to
the carrying value of each of the brands within the Sanctuary Spa
CGU and the Childs Farm CGU. The significant decline in the washing
and bathing category exacerbated by the recent onset of the cost of
living crisis was determined to be the indicator of impairment in
each case, and in addition for Sanctuary Spa, the impact of adverse
foreign currency exchange rates on margins was also determined to
be a factor.. As a result, an impairment test was performed for
each CGU using management's best estimate of future performance and
using the board approved five year plan.
For the Sanctuary Spa CGU, where the carrying value of the brand
at period end was GBP75.4 million. The key assumptions used in the
projections covering the five year period of the approved budgets
and plans related to revenue and gross margin growth, and beyond
this period, assumed an annual long-term growth rate of 2.0%. A
9.7% pre-tax discount rate was applied to the projections. The
value in use amount exceeded the carrying amount of the CGU, and
further, management did not identify any reasonable possible
changes in the key assumptions which would cause the carrying
amount to exceed its recoverable amount. Management therefore
concluded that no impairment was required at the balance sheet
date.
For the Childs Farm CGU, where the carrying value of the brand
at period end was GBP35.5 million and the allocated goodwill was
GBP16.8 million. For the year ended 31 May 2022 the recoverable
amount was determined on the basis of fair value less costs of
disposal due to the proximity of the acquisition to the year end.
For the impairment test for this period, the recoverable amount was
calculated as the value of use using cash flow projections. The key
assumptions used in the projections covering the five year period
of the approved budgets and plans related to revenue growth in the
UK and new international markets and improving cost to revenue
ratios for overheads and marketing costs, and beyond this period,
assumed an annual long-term growth rate of 2.0%. A 10.0% pre-tax
discount rate was applied. The revenue growth recognises that this
brand is highly complementary to the Group's strategic focus and
will benefit from leveraging the Group's brand building
capabilities to improve its UK leadership position while seeking to
also capture its significant international potential. The value in
use amount exceeded the carrying amount of the CGU, and further,
management did not identify any reasonable possible changes in the
key assumptions which would cause the carrying amount to exceed its
recoverable amount. Management therefore concluded that no
impairment was required at the balance sheet date.
Capital commitments
At 3 December 2022, the Group had entered into commitments for
the acquisition of property, plant and equipment amounting to
GBP0.9 million (27 November 2021: GBP1 million). At 3 December
2022, the Group's share in the capital commitments of joint
ventures was GBPnil (27 November 2021: GBPnil).
7. Taxation
The taxation expense in relation to continuing operations
was:
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
---------------- ------------ ------------- ---------
United Kingdom (0.2) (0.2) 1.5
Overseas 9.4 3.8 11.8
---------------- ------------ ------------- ---------
9.2 3.6 13.3
---------------- ------------ ------------- ---------
* See note 2.
Income tax expense is recognised based on management's best
estimate of the annual effective tax rate ("ETR") expected for the
full financial year. The estimated annual ETR for the year to 31
May 2023 is 22.7% (half year to 27 November 2021: actual ETR
including discontinued operations 15.8%; year to 31 May 2022:
actual ETR including discontinued operations 20.8%). On an adjusted
basis, the estimated annual ETR is 26.6% (half year to 27 November
2021: 21.6%; year to 31 May 2022: actual ETR 19.5%).
The calculation of the Group's total tax charge necessarily
involves a degree of estimation and judgement in respect of certain
items whose tax treatment cannot be finally determined until
resolution has been reached with the relevant tax authority or, as
appropriate, through a formal legal process. At 3 December 2022,
the Group had a provision of GBP26.5 million and contingent
liabilities of GBP8.7 million in respect of such uncertain tax
positions (31 May 2022: GBP31.0 million and GBP8.9 million
respectively), which are in relation to claims and assessments.
Some of these assessments take place in overseas markets where
there is a history of large claims being received, but which are
considered to have little or no basis, and ultimately result in
immaterial cash outflows. In relation to the contingent
liabilities, whilst the Group considers that there is a low
possibility of any material outflow as a result of these claims,
they have been disclosed as such in accordance with IAS 37
'Provisions, Contingent Liabilities and Contingent Assets'.
8. Dividends
An interim dividend of 2.67p per share for the half year to 3
December 2022 (2021: 2.67p) has been declared totalling GBP11.2
million (2021: GBP11.2 million) and is payable on 6 April 2023 to
shareholders on the register at the close of business on 10 March
2023. 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 2022 of
3.73p per share, totalling GBP15.6 million, was approved by
shareholders at the Annual General Meeting of the Company and paid
on 30 November 2022.
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 Audited
3 December 27 November 31 May
2022 2021 2022
Number Number Number
000 000 000
------------------------- ----------- ------------ -------
Basic weighted average 418,577 418,456 418,476
------------------------- ----------- ------------ -------
Diluted weighted average 423,008 420,456 420,841
------------------------- ----------- ------------ -------
9. Earnings per share (continued)
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 Audited
3 December 27 November 31 May
2022 2021 2022
Number Number Number
000 000 000
------------------------------------------- ------------- ------------ ----------
Average number of ordinary shares in issue
during the period/year 428,725 428,725 428,725
less: weighted average number of shares
held by Employee Share Option Trust (10,148) (10,269) (10,249)
------------------------------------------- ------------- ------------ ----------
Basic weighted average number of shares
in issue during the period/year 418,577 418,456 418,476
Dilutive effect of share incentive plans 4,431 2,000 2,365
------------------------------------------- ------------- ------------ ----------
Diluted weighted average number of shares
in issue during the period/year 423,008 420,456 420,841
------------------------------------------- ------------- ------------ ----------
Total earnings per share
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------- ----------- ------------ --------
Profit after tax attributable to owners
of the Parent 24.7 17.0 48.5
Adjusting items after taxation, attributable
to owners of the Parent (3.1) 5.9 2.9
--------------------------------------------- ----------- ------------ --------
Adjusted profit after tax attributable
to owners of the Parent 21.6 22.9 51.4
--------------------------------------------- ----------- ------------ --------
pence pence pence
--------------------------------------------- ----------- ------------ --------
Basic earnings per share 5.90 4.06 11.59
Impact of adjusting items (0.74) 1.41 0.69
--------------------------------------------- ----------- ------------ --------
Adjusted basic earnings per share 5.16 5.47 12.28
--------------------------------------------- ----------- ------------ --------
Diluted earnings per share 5.84 4.04 11.52
Impact of adjusting items (0.73) 1.40 0.69
--------------------------------------------- ----------- ------------ --------
Adjusted diluted earnings per share 5.11 5.44 12.21
--------------------------------------------- ----------- ------------ --------
* See note 2.
From continuing operations
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------- ------------- ------------ --------
Profit after tax from continuing operations
attributable to owners of the Parent 24.7 17.7 50.3
Adjusting items after taxation, attributable
to owners of the Parent (3.1) 5.9 2.9
--------------------------------------------- ------------- ------------ --------
Adjusted profit after tax attributable
to owners of the Parent 21.6 23.6 53.2
--------------------------------------------- ------------- ------------ --------
pence pence pence
--------------------------------------------- ------------- ------------ --------
Basic earnings per share 5.90 4.23 12.02
Impact of adjusting items (0.74) 1.41 0.69
--------------------------------------------- ------------- ------------ --------
Adjusted basic earnings per share 5.16 5.64 12.71
--------------------------------------------- ------------- ------------ --------
Diluted earnings per share 5.84 4.21 11.95
Impact of adjusting items (0.73) 1.40 0.69
--------------------------------------------- ------------- ------------ --------
Adjusted diluted earnings per share 5.11 5.61 12.64
--------------------------------------------- ------------- ------------ --------
* See note 2.
9. Earnings per share (continued)
From discontinued operations
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------- ------------ ------------ --------
Loss after tax from discontinued operations
attributable to owners of the Parent - (0.7) (1.8)
Adjusting items after taxation, attributable
to owners of the Parent - - -
--------------------------------------------- ------------ ------------ --------
Adjusted loss after tax attributable to
owners of the Parent - (0.7) (1.8)
--------------------------------------------- ------------ ------------ --------
pence pence pence
--------------------------------------------- ------------ ------------ --------
Basic loss per share - (0.17) (0.43)
Impact of adjusting items - - -
--------------------------------------------- ------------ ------------ --------
Adjusted basic loss per share - (0.17) (0.43)
--------------------------------------------- ------------ ------------ --------
Diluted loss per share - (0.17) (0.43)
Impact of adjusting items - - -
--------------------------------------------- ------------ ------------ --------
Adjusted diluted loss per share - (0.17) (0.43)
--------------------------------------------- ------------ ------------ --------
10. Reconciliation of profit before taxation to cash generated from operations
(restated*)
Unaudited Unaudited
Half year Half year Audited
to to Year to
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
----------------------------------------------- -------------- ------------- ---------
Profit before taxation from continuing
operations 40.5 23.5 65.3
Loss before taxation from discontinued
operations - (0.7) (1.7)
----------------------------------------------- -------------- ------------- ---------
Profit before taxation 40.5 22.8 63.6
(Deduct)/add back: net finance (income)/costs
(note 5) (1.3) 0.9 1.3
----------------------------------------------- -------------- ------------- ---------
Operating profit 39.2 23.7 64.9
Depreciation (notes 6 and 15) 5.2 6.3 12.8
Amortisation (note 6) 3.1 3.4 6.6
Impairment of tangible and intangible
assets 0.1 18.0 17.5
Impairment reversal on intangible assets
reclassified as held for sale - - (8.5)
Profit on sale of assets (11.7) (11.1) (14.0)
Profit on disposal of businesses - (1.7) (1.7)
Derecognition of capitalised costs related
to cloud computing arrangements - 1.5 1.0
Other recycling of foreign exchange losses - 1.5 1.4
Difference between pension charge and
cash contributions (0.3) 0.1 1.1
Share-based payment charges 1.2 2.0 1.9
Share of results from joint ventures (3.7) (4.1) (6.6)
Operating cash flows before movements
in working capital 33.1 39.6 76.4
Movements in working capital:
Inventories (23.5) (14.8) (14.5)
Trade and other receivables (13.9) (16.6) 4.0
Trade and other payables 15.8 16.8 0.4
Provisions (4.5) - (0.1)
----------------------------------------------- -------------- ------------- ---------
Cash generated from operations 7.0 25.0 66.2
----------------------------------------------- -------------- ------------- ---------
* See note 2.
11. Net debt reconciliation
Group net debt, which is an alternative performance measure,
comprises the following:
Unaudited
Audited Foreign Unaudited
At 1 June Unaudited exchange Unaudited At 3 December
2022 Cash flow movements Other* 2022
GBPm GBPm GBPm GBPm GBPm
--------------------------- ----------- ----------- ----------- ---------- ---------------
Cash at bank and in
hand 105.8 17.5 (4.7) - 118.6
Short term deposits 58.0 22.4 (3.2) - 77.2
Overdrafts (0.1) 0.1 - - -
Cash and cash equivalents 163.7 40.0 (7.9) - 195.8
Current asset investments 0.5 - - - 0.5
Non-current borrowings (174.0) (58.0) - - (232.0)
Adjusted net debt (9.8) (18.0) (7.9) - (35.7)
--------------------------- ----------- ----------- ----------- ---------- ---------------
Lease liabilities (16.9) 1.6 - 1.3 (14.0)
--------------------------- ----------- ----------- ----------- ---------- ---------------
Net debt (26.7) (16.4) (7.9) 1.3 (49.7)
--------------------------- ----------- ----------- ----------- ---------- ---------------
* Other includes the derecognition of lease liabilities offset
by lease addition and an increase in the lease liability arising
from the unwinding of the interest element.
During the period the Group agreed a new GBP325 million
committed credit facility which is available for general corporate
purposes. The credit facility incorporates both a term loan and
revolving credit facility ("RCF") structure, with maturity dates of
up to November 2028, and replaced the previous GBP325 million RCF
facility which was due to expire in November 2023. At 3 December
2022, this facility was GBP232 million drawn (31 May 2022: GBP174
million).
In addition, the Group retains other unsecured and uncommitted
facilities that are primarily used for trade related activities. At
3 December 2022, these amounted to GBP267 million (31 May 2022:
GBP252.3 million) of which GBP69.1 million, or 25.9% were utilised
(31 May 2022: GBP53.8 million or 21.3%).
Overdrafts do not form part of the Group's main borrowing
facility and only arise as part of the Group's banking arrangements
with key banking partners.
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
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
---------------------------------- ----------- ------------ --------
UK schemes in surplus 83.9 104.4 128.1
Restriction due to asset ceiling (47.5) (58.5) (58.8)
---------------------------------- ----------- ------------ --------
36.4 45.9 69.3
UK schemes in deficit (3.1) (4.7) (3.5)
Net UK position 33.3 41.2 65.8
Overseas schemes (8.8) (9.3) (9.6)
---------------------------------- ----------- ------------ --------
24.5 31.9 56.2
---------------------------------- ----------- ------------ --------
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.
12. Retirement benefits (continued)
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 to reflect changes in market
conditions where appropriate from those applied at 31 May 2022. The
key assumptions applied were:
Unaudited Unaudited Audited
Half year Half year
to to Year to
3 December 27 November 31 May
2022 2021 2022
% per % per
annum % per annum annum
----------------------------------------- ------------ ------------- --------
Rate of increase in retirement benefits
in payment 2.80% 3.35% 2.75%
Discount rate 4.45% 1.60% 3.50%
Inflation assumption (RPI) 2.95% 3.50% 3.15%
----------------------------------------- ------------ ------------- --------
The movement in the retirement benefit net surplus during the
period for the UK schemes is as follows:
Unaudited Unaudited
3 December 27 November
2022 2021
GBPm GBPm
--------------------------------------------------------- ------------ -------------
At 1 June 65.8 29.1
Net pension interest income 1.1 0.2
Administration expenses paid by the schemes (0.5) -
Employer direct benefit payments 0.1 0.1
Remeasurement gain/(loss) due to changes in assumptions
and
experience adjustments 17.4 (28.5)
(Loss)/gain on scheme assets (excluding interest
income) (62.9) 44.6
Changes in asset ceiling 12.3 (4.3)
--------------------------------------------------------- ------------ -------------
At end of period 33.3 41.2
--------------------------------------------------------- ------------ -------------
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 at 31 May 2022. There have been no
significant changes to risk management policies or processes since
the year end.
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).
----- --------------------------------------------------------------------
13. Financial risk management and financial instruments (continued)
The financial instruments held at fair value by the Group relate
to foreign currency forward contracts used as derivatives for
hedging. For both the half years ended 3 December 2022 and 27
November 2021, and the year ended 31 May 2022 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
At At At
3 December 27 November 31 May
2022 2021 2022
GBPm GBPm GBPm
------------------------------------ ------------ ------------- --------
Assets
Foreign currency forward contracts 3.9 1.2 0.7
------------------------------------ ------------ ------------- --------
Liabilities
Foreign currency forward contracts 0.5 1.1 1.6
------------------------------------ ------------ ------------- --------
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
14. Related party disclosures
PZ Wilmar Limited
Certain Group subsidiary companies enter into related party
transactions with PZ Wilmar Limited, a joint venture interest which
was set up under the terms of a joint venture agreement with Wilmar
International Limited. Set out below are details of related party
transactions during the period with PZ Wilmar Limited as well as
balances at 3 December 2022:
- During the period, interest bearing loans amounting to GBP11.4
million were advanced to the PZ Wilmar Limited. These loans are
repayable on demand and not secured. At 3 December 2022, the
outstanding loan balance receivable in relation to these interest
bearing loans was GBP11.0 million (31 May 2022: GBPnil; 27 November
2021: GBP7.2 million).
- At 3 December 2022, outstanding non-interest bearing loans
receivable from PZ Wilmar Limited amounted to GBP40.6 million (31
May 2022: 39.6 million; 27 November 2021: GBP37.5 million). These
receivables relate to long term loan investments that have been
made by both joint venture partners and are presented as part of
the Group's net investment in its joint venture. These loans are
repayable following a notice period of 12 months and are not
secured.
- At 3 December 2022, the outstanding trade receivable balance
due from PZ Wilmar Limited was GBP1.3 million (31 May 2022: GBP1.7
million; 27 November 2021: GBP2.2 million).
All trading balances are settled in cash. There were no
provisions for doubtful related party receivables at 3 December
2022 (31 May 2022: GBPnil; 27 November 2021: GBPnil) and no charge
to the income statement in respect of doubtful related party
receivables (half year to 27 November 2021: GBPnil).
15. IFRS 16 'Leases'
The Group has lease contracts for various items of property,
motor 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 Motor vehicles Other equipment Total
GBPm GBPm GBPm GBPm
------------------------------- ----------- --------------- ---------------- ------
At 1 June 2022 13.6 2.3 1.0 16.9
Additions 0.7 - - 0.7
Depreciation (1.2) (0.1) (0.1) (1.4)
Derecognition of right-of-use
assets (1.6) - (0.3) (1.9)
Currency translation - (0.1) - (0.1)
------------------------------- ----------- --------------- ---------------- ------
At 3 December 2022 11.5 2.1 0.6 14.2
------------------------------- ----------- --------------- ---------------- ------
Set out below are the carrying amounts of lease liabilities and
the movements during the period:
Lease liability GBPm
--------------------------------- -----
At 1 June 2022 16.9
Additions 0.7
Accretion of interest 0.2
Payments (1.6)
Derecognition of lease liability (2.2)
At 3 December 2022 14.0
--------------------------------- -----
Classified as:
Current liabilities 2.1
Non-current liabilities 11.9
--------------------------------- -----
Total lease liabilities 14.0
--------------------------------- -----
The following are the amounts recognised in profit or loss:
Unaudited Unaudited
Half year Half year
to to
3 December 27 November
2022 2021
GBPm GBPm
--------------------------------------------------- ----------- ------------
Depreciation expense of right-of-use assets 1.4 1.7
Interest expense on lease liabilities 0.2 0.2
Expense relating to short-term or low-value assets 0.1 0.1
--------------------------------------------------- ----------- ------------
Total amount recognised in profit or loss 1.7 2.0
--------------------------------------------------- ----------- ------------
16. 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.
17. 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 84 of
our 2022 Annual Report and Financial Statements 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 unchanged from
those outlined on pages 86 to 93 of our 2022 Annual Report and
Financial Statements. These are: consumer, customer and economic
trends; talent retention and development; IT and information
security; sustainability and environment; business transformation;
health & safety; supply chain and logistics; legal and
regulatory compliance; financial controls (treasury and tax); and
pandemic.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with
UK-adopted International Accounting Standard 34, 'Interim Financial
Reporting', 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 half year and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining period of the financial year;
and
-- material related-party transactions in the first half year
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 36. A list of
current Directors is maintained on the PZ Cussons plc website.
By order of the Board
Mr K Massie
Company Secretary
7 February 2023
INDEPENDENT REVIEW REPORT TO PZ CUSSONS PLC
Conclusion
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 3 December 2022 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of other comprehensive income, the condensed consolidated balance
sheet, the condensed consolidated statement of changes in equity,
the condensed consolidated cash flow statement and related notes 1
to 17.
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 3
December 2022 is not prepared, in all material respects, in
accordance with United Kingdom adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 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 (ISRE (UK) 2410). 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.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410; however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of 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.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report. Our Conclusion, including our Conclusion Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
ISRE (UK) 2410. 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
London, UK
8 February 2023
Directors
Chair
C Silver *
Chief Executive
J Myers
Chief Financial Officer
S Pollard
D Tyler *
K Bashforth *
V Juarez *
D Kucz *
J Nicolson *
J Sodha *
J Townsend *
* Non-executive
Company 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
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END
IR FFFILFTIDIIV
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February 08, 2023 02:00 ET (07:00 GMT)
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