27th Jan 2015 07:39
LONDON (Alliance News) - PZ Cussons PLC, maker of bath products Imperial Leather and Original Source, on Tuesday reported a drop in both profits and revenue in the first half of its financial year, due to recent business disposals and weak trading in Africa.
The consumer products group posted a pretax profit of GBP39.7 million for the half-year to end-November, down 7.9% on the prior year's GBP43.1 million profit, as revenue fell by more than 10% to GBP386.7 million from GBP431.8 million the year before.
The group said recent business disposals shaved around GBP34 million from first-half revenue and GBP3.4 million from operating profit.
PZ Cussons also said it traded in "difficult markets" in the first half, citing operating profit growth in both Europe and Asia, but lower profits in Africa, hit by challenging trading conditions in the region, particularly in its largest market Nigeria, due to the devaluation of the naira.
"The robust underlying performance in the UK, Australia, Indonesia and in particular in the Electrical and Food divisions in Nigeria, demonstrates that the strategy of ongoing product innovation with a focus on local consumer needs continues to be successful," said Chairman Richard Harvey in a statement.
"The acquisition of the Australian food brand five:am further enhances the group's Food and Nutrition portfolio and, together with the Rafferty's Garden brand acquired last year, creates a broader portfolio for roll-out across Asia," he added.
PZ Cussons declared a 3.2% increase in its interim dividend to 2.61 pence per share.
The group said that while it faces "short-term challenges", it remains confident about the medium and long term opportunities in Africa.
"We have built a profitable and growing Electricals division, are seeing excellent growth in Food and Nutrition, and have a leading position in Personal Care and Home Care, all of which are poised to benefit once stability is re-established and the economy grows," said Harvey, adding: "Our balance sheet is strong and we have the appetite to pursue further investment opportunities which fit our strategic aims."
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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