PZ Cussons cautious after ‘robust’ first half

PZ CUSSONS, the North West consumer products group behind the Imperial Leather, Original Source, Sanctuary and most recently St Tropez brands, sounded a note of caution as it reported a 3.4% increase in half year profits.

The Manchester company said it was being affected by continuing high levels  of promotional activity in the UK market particularly in the shower gel and anti-bacterial handwash categories.

In the six months to November 30 PZ Cussons grew profits to £46.2m from £44.7m on revenue up 1.3% at £374.8m. Despite this the half year dividend was hiked 10% to 2.123p per share.

Chairman Richard Harvey described the performance as “robust” in the face of some challenges in a number of markets, including this country.

Looking forward he said: “Whilst we remain cautious given continued challenging trading conditions and rising raw material prices, our outlook for the full year is broadly in line with expectations.”

PZ Cussons said the results of its European business were down year-on-year for a number of reasons, including an impact from the Greek economic crisis and tough comparisons with last year when UK sales of its Carex anti-bacterial handwash rocketed amid the swine flu outbreak.

In Africa performance was described as “broadly flat” amid economic uncertainty ahead of presidential elections in Nigeria – one of the company’s biggest markets.

The Asian business saw strong growth in profits, with the Australian, Indonesian and Middle East all performing well.

The company said the £62.5m acquisition of self-tan brand St Tropez, which completed last September, was an “excellent strategic opportunity” with good growth potential in the US Australia.

St Tropez has performed well since the acquisition, PZ Cussons added.