PZ Cussons steady despite challenges in key markets

CONSUMER products group PZ Cussons said it is continuing to perform well in the domestic market and negotiate choppy waters in some of its international markets, most notably Africa.

The Manchester company, famous for brands such as Imperial Leather and fake tanning product St Tropez, said in a trading update covering the period June 1 to September 22 its performance had been in line with management expectations.

Amid challenging trading conditions in many markets the group is looking to cut costs where possible, while also investing in rolling-out products such as organic children’s food brand Rafferty’s Garden into new markets.

In the UK, PZ Cussons said performance in the washing and bathing division (Original Source, Carex and Imperial Leather) has been strong despite challenging trading conditions, driven by “an exciting innovation pipeline” including the relaunch of the entire Imperial Leather range during the period.

The beauty division has performed well across its key markets of UK, US and Australia, with St Tropez’s performance continuing to be boosted by Kate Moss as brand ambassador, it added.

The company said it had seen good performance across all categories in Australia.  The acquisition of food brand 5:AM, which completed in early August for £44.1m, has shown “pleasing performance” to date, while the international expansion of Rafferty’s Garden, acquired last year, will begin with the launch of the range into New Zealand.

Regarding Africa, the company said: “In Nigeria, disruption in the north of the country has continued to worsen, resulting in a decline in sales in that region.

“Good growth has continued in the south of the country, in particular in the electrical goods business and in the two food and nutrition joint ventures. Whilst the impact of the West African Ebola outbreak has been relatively small in Nigeria, the situation is being carefully monitored.

“In Ghana, performance has been affected by the continued weakening in the Cedi, whilst in Kenya performance has been in line with expectations.”

Looking ahead the company stated: “Whilst trading conditions in most markets remain challenging, the group remains focussed on a dynamic and fast brand renovation and innovation programme, an ongoing cost reduction programme and successful delivery of new areas of growth such as Rafferty’s Garden, Five:AM and the PZ Wilmar joint venture.

“These initiatives will help to offset the continuing macro challenges, including foreign exchange and raw material volatility, and the reduction in profits from Poland as a result of last year’s Home Care brands sale.”