12th Jun 2014 07:50
LONDON (Alliance News) - Consumer products group PZ Cussons PLC Thursday said its profit for the year ended May 31 was in line with management expectations and higher than the previous year, but said that currency movements wiped around GBP12 million off its profit for the year.
In a trading update ahead of the release of its full-year results on July 29, the company, which owns brands including Imperial Leather and Original Source, said that trading conditions remain tough in most of its markets, while weakening currencies have also added to its woes.
The company said that while it expects its profit before tax and exceptional items for the year in sterling terms to be around 6% higher than the previous year, weaker currencies, such as the Australian dollar, wiped around GBP12 million off its profit for the year.
"Excluding this impact, profits would have been 17% higher than the previous year," the company said in its statement.
The group said its financial position remains strong, with good cash generation and only a small net debt position at the year end. it said it remains well placed to pursue "new areas of growth".
PZ Cussons said that within its European division, its UK washing and bathing business saw strong sales growth from its brands Imperial Leather, Carex and Original Source, which it said was driven by a significant renovation and innovation programme. It said that the entire Imperial Leather range will be relaunched over the coming months, with new products, imagery and fragrances.
"Product portfolios have been optimised both for the big four supermarkets as well as further increasing distribution in other channels," it said.
Within its beauty division, the company said consumer demand for its St Tropez tanning products continued to be boosted by the appointment of the model Kate Moss as brand ambassador. In the UK, it said its Sanctuary, Charles Worthington and Fudge brands performed well, and have also now secured new overseas distributions.
During the year the company sold its homecare brands in Poland for GBP46.6 million. At the time it said it would introduce initiatives to counter the reduction in profits from brand disposal.
PZ Cussons said Thursday that it is now focused on investing and growing the personal care brands of Luksja, Original Source and Carex, as well as growing its Rafferty's Garden baby-food brand and its joint venture with Wilmar. It also said its performance in Greece continues to show signs of improvements.
"These initiatives will help to offset the continuing macro challenges and the reduction in profits from Poland as a result of the homecare sale," it said.
In Asia, PZ Cussons said that its brands Morning Fresh and Radiant performed well during the year, but profitability in Australia was hit by a weaker Australian dollar. The company said that its Rafferty's Garden baby-food brand will be launching a number of new products and expanding internationally before the end of 2014.
Elsewhere in Asia, the company said its saw continued positive sales momentum in Indonesia, although profits in the region were held back by a weaker rupiah. It said it saw progress in its babycare and non-babycare portfolios as well as with distribution in other South East Asian territories.
"Overall trading in the smaller territories of Thailand and the Middle East has been broadly in line with expectations," the company said.
In Africa, the group said that trading during the year was hit by unrest in northern Nigeria, and profitability in Ghana continues to be held back by further weakening in the cedi. Kenya meanwhile, it said, performed in line with expectation.
PZ Cussons shares were trading 0.3% higher at 358.00 pence Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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