PZ Cussons expects 10% profit rise in first half

SHOWER gel to self tanning group PZ Cussons says half-year profits are up 10% on last year after a “robust” trading performance in the UK and an improvement in Australia.

The Manchester company said overall trading in the six months to November 30  had been in line with expectations with revenues “broadly flat” as a result of continuing challenges in its important Nigerian market.

In a trading update ahead of its interim results to be published on January 29 PZ Cussons said its core washing and bathing division in the UK – led by the Imperial Leather, Carex and Original Source brands had performed well with an increase in profits compared to last year despite continued high levels of promotional activity in the trade.

The group’s new mother and baby range, ‘Cussons Mum & Me’  has now achieved full UK distribution  and the brand has been very positively received by consumers with encouraging early rates of sale, it said.

In its beauty division, profits are also up, despite its St Tropez self tannning brand being adversely affected by the poor summer.

The Sanctuary brand though performed “particularly well” benefiting from the launch of the new Active reverse skin care range with ballet star and Strictly Come Dancing judge Darcey Bussell as brand ambassador.

The Fudge hair care brand, acquired earlier in the year, has also performed well with a new Fudge.com e-commerce site launched towards the end of the period.

In its Polish business performance has been robust with revenue and profit ahead of the prior period, but in Greece, there was a continued fall, due to continued economic woes there.

Revenue and profitability in Greece are lower as a result of the domestic economic situation.

In the group’s Asia region, while trading conditions in Australia remain challenging, the steps taken to improve the business, which include the closure of a production facility, have returned it to profitability in the period.

Continued positive momentum in Indonesia has delivered another period of revenue and profit growth largely from the market-leading Cussons Baby range.

Trading in the smaller territories of Thailand and the Middle East has been in line with expectations.

In the key Nigerian market, sales during the period have been affected by social unrest in the north, flooding in a large number of states, and the more general impact on consumer disposable income as a result of the removal of part of the fuel subsidy earlier in the year.

Looking ahead, the company said: “Trading conditions in most markets remain challenging with continued pressures on consumer disposable income. The situation in the Group’s important Nigerian market continues to be fragile although the longer term opportunity remains exciting.

“The group’s focus remains on new product development and further margin improvement. Raw material cost trends are expected to be favourable this year and the benefits of the supply chain optimisation project are also beginning to be seen.

“The board remains confident of a return to profitable growth in the current financial year.”