PZ Cussons Plc released an interim management statement covering the period June 1, 2012 to September 18, 2012, in advance of its annual general meeting. Regarding its financial performance and position, a company overview shows the performance has been in line with management expectations and its financial position strong with cash generation during the period also in line with expectations.
In the U.K., trading in PZ Cussons’ washing and bathing division has been robust despite continued high levels of promotional activity in the trade. New product launches remain key to driving differentiation and attracting consumers, and the next few months will see the launch of new Imperial Leather limited edition shower and bath products, as well as a new seasonal edition of Original Source. Also, Cussons Mum and Me, the new range of products for mother and baby from PZ Cussons, achieved full U.K. distribution by the end of July and an extensive media campaign began in the middle of August. Early sales rates are encouraging.
In the U.K. beauty division, while the poor summer weather adversely impacted sales of St. Tropez tanning products, the other brands in the portfolio have performed well, with Sanctuary benefiting from the launch of the new Active Reverse skin care range with ballet star Darcey Bussell as a brand ambassador. Further new product launches for both U.K. and international markets are planned during the remainder of the calendar year.
In the rest of Europe, performance in Poland has been strong while trading conditions in Greece remain difficult.
For the company’s Asia-Pacific region efforts, the positive momentum in Indonesia has continued with further growth in revenue and profitability during the period. While trading conditions in Australia remain challenging, the measures taken to improve the performance of the business continue to be successfully implemented.
PZ Cussons’ business in Africa still sees challenges. In Nigeria, the two key issues affecting performance have remained. Unrest in the north of the country has continued to affect sales rates and consumer disposable income remains affected by the removal of part of the fuel subsidy in January. More positively however, margins have improved as a result of lower raw material costs and margin improvement projects. Also, construction of the palm oil refinery with Wilmar in Nigeria is on track with completion due by the end of the calendar year.
The company’s overall outlook sees trading conditions in most markets remain challenging as a result of general uncertainty regarding the global economic outlook and pressures on consumer disposable income from high food and fuel prices. The situation in PZ Cussons’ important Nigerian market continues to be fragile although the longer-term opportunities remains exciting.
PZ Cussons’ focus remains on new product development and further margin improvement. Raw material cost trends are expected to be favorable this year and the benefits of the supply chain optimization project are also beginning to be seen. The company’s board remains confident of a return to profitable growth in the current financial year.