Profits soar at PZ Cussons

THE boss of Imperial Leather maker PZ Cussons today hailed a positive future for the group, which defied the downturn to reveal a bumper hike in profits.

In the six months to November 30, pre-tax profits before one-off costs rose 13.5% to £36.9m, while turnover soared 31.5% to £393.8m.

Brandon Leigh, finance director of the Stockport-based group, said trading across all of its territories was strong, and its ‘local brand for local markets’ business model has enabled fast reaction to local economic conditions.

In the UK, PZ Cussons maintained its number one position in the personal care market, driven by significant new brand launches of “good products at good value” across the Imperial Leather, Original Source, Charles Worthington and Carex ranges.

The Sanctuary brand also delivered profitable growth and its ‘refreshed’ Christmas range produced a strong performance.

Mr Leigh said the group has not been immune to the economic conditions and has diverted cash, which would have been used for TV commercials and other advertising, to support prices in stores, such as two-for-one offers.

The group said that PZ Cussons’ strong cash position and healthy balance sheet, which has a relatively modest net debt of £40.8m, will enable it to continue with its capital investment programme, including new supply chain facilities in its major markets of Nigeria.

Trading in its personal care, electrical and nutrition businesses in Nigeria, which has been less impacted by the effects of the global credit crunch, has been strong, while its Asian business has also experienced good growth.

Chairman Anthony Green added: “The group has delivered a strong performance in the first half despite the worsening global economic conditions. Its diverse geographical spread, together with its ability to react quickly on a local basis, is ensuring continued profitable growth.

“The first half performance was achieved despite further increases in raw material costs and significant exchange rate volatility in most markets.

“Overall performance since the period end has been in line with management expectations and we remain cautiously optimistic for the full year outturn despite the uncertain global economic picture.”

PZ Cussons announced it is increasing its interim dividend payment by 10% to 1.18p per share.