Second Quarter Results
Trading profit in the quarter was $212 million, representing strong underlying growth of 17% and the Group trading margin increased by 310 basis points to 22.9%. The margin improvement flows from progress in our Earnings Improvement Programme (“EIP”), tight cost control and a weaker comparative period.
The net interest charge was $11 million. The tax charge was at the estimated effective rate for the full year of 31.8% on profit before restructuring and rationalisation costs, acquisition related costs and amortisation of acquisition intangibles. Adjusted attributable profit of $136 million is before the costs of restructuring and rationalisation, acquisition related costs and amortisation of acquisition intangibles and taxation thereon.
Adjusted earnings per share increased by 10% to 15.4cents (77.0 cents per American Depositary Share, “ADS”). Basic earnings per share was 13.4 cents (67.0 cents per ADS) compared with 11.6 cents (58.0 cents per ADS) in 2008.
Trading cash flow (defined as cash generated from operations less capital expenditure but before the costs of macrotextured settlements, acquisition related costs and restructuring and rationalisation costs) was $135 million in the quarter reflecting a trading profit to cash conversion rate of 64%.
Net debt increased in the quarter to $1,205 million, primarily due to dividend payments and currency movements.
A first interim dividend of 5.46cents per share (27.3 cents per ADS) will be paid on November 3, 2009 to shareholders on the register at the close of business on 16 October 2009. This represents a 10% increase on the 2008 first interim dividend.
Reported revenues were $1,791 million, with underlying growth at 2% compared to the same period last year.
Reported trading profit for the year to date was up 15% underlying to $395 million, with trading margin improving by 210 basis points to 22.0%. The net interest charge was $21 million. The tax charge of $106 million reflects the estimated effective rate for the year of 31.8%. Adjusted attributable profit of $252 million is before the costs of restructuring and rationalisation, acquisition related costs, amortisation of acquisition intangibles and taxation thereon. Attributable profit was $216 million.
EPSA rose by 6.3% to 28.5 cents (142.5 cents per ADS). Reported basic earnings per share were 24.5cents (122.5cents per ADS).
Trading cash flow was $263 million compared with $273 million a year ago. This is a trading profit to cash conversion ratio of 67% compared with 72% a year ago.
