Tough trading and higher costs hit PZ Cussons

PZ CUSSONS, the listed manufacturer of personal wash and beauty brands, says first half profits have been “below expectations”  after margins in its core markets were squeezed and trading was tough in other locations.

The international Manchester-based company, the name behind the Imperial Leather, Carex, Original Source and Sanctuary Spa brands, said while revenues in the UK, Indonesia and Nigeria in the six months to the end of November had seen good growth,high raw material costs and adverse exchange rate movement had dented margins.

At  the same time trading conditions in Australia, Greece, Thailand and the Middle East, “have been challenging”, the company said.

In the UK PZ Cussons said its washing and bathing division had experienced good revenue growth despite worsening consumer confidence.

To drum up sales it said its retail customers were relying  on high levels of promotional activity and this as well as high raw material prices had put “some pressure” on margins.

Performance in Poland has been robust with revenue and profit ahead of the prior period. Trading conditions in Greece have been difficult as a result of the domestic economic situation.
 
Revenue and profit in Australia are down due to “competitive trading conditions” among retailers there as well as high raw material costs.
 
Trading in the Middle East has been affected by social and political unrest in those territories. Supply of products from Thailand was affected by the recent floods too, although the group said this was “now returning to near normal”.

Looking ahead to the outlook for the full year PZ Cussons said any major improvement to trading conditions on the horizon.

“Our focus remains on driving profitable growth for the year through continued brand renovation and margin improvement in all territories. Our strong financial position will enable us to invest in attractive medium term growth opportunities in our core markets in Europe, Asia and Africa,” it added.

The group will announce its half year results on January 24.