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PZ Cussons Reports 2011 Six-Month Financial Results

Posted: February 7, 2012

PZ Cussons Plc announced its interim results for the six months ended Nov. 30, 2011. The company reported revenue of £414 million for the half-year ending Nov. 30, 2011, a 10.5% increase over £374.8 million reported in the same time period in 2010.

Commenting on the report, chairman Richard Harvey said, “The group has delivered good revenue growth of 10% in the first half particularly in its core markets of U.K., Indonesia and Nigeria. This growth momentum has helped the group to partially offset the significant impact from high raw material costs and challenging trading conditions in other markets.

“Post period end the group acquired the Fudge hair care brand for £25.5 million as part of its strategy to acquire leading brands and to further widen the category participation of its newly formed beauty division. Other strategic initiatives, such as the new joint venture in Nigeria with Wilmar International, are progressing well. Our balance sheet remains strong, and we have the appetite to pursue further investment opportunities [that] fit our strategic aims. We anticipate trading conditions in some markets will continue to be difficult for the remainder of the year, and, in particular, we are closely monitoring the current economic and social tensions in Nigeria, which may further impact the year-end outturn. Overall, we anticipate that results for the full year will be towards the bottom end of the range of current expectations,” Harvey concluded.

The company also noted profit before tax and exceptional items for the six-month period ending Nov. 30, 2011 was £40.2 million (down from 2010’s £46.2 million) on revenue up 10.5% to £414.0 million (up from 2010’s £374.8 million). There were exceptional charges in the period of £0.9 million, and after the exceptional items, reported profit before tax decreased by 11.7% to £39.3 million (2010’s profit was £44.5 million).

PZ Cussons delivered good revenue growth in the first half with its core markets of U.K., Indonesia and Nigeria performing particularly well. Profits have been impacted as a result of significantly higher raw material costs, adverse exchange rate movements and challenging trading conditions in other markets, particularly Australia. However revenue growth in Africa was strong with positive momentum in Nigeria continuing post the elections of April 2011, though profits were flat as a result of high raw material costs impacting margins. Asia revenue and profit are lower than the prior period as a result of difficult trading conditions in Australia, Thailand and the Middle East, but revenue and profit in Indonesia were ahead of the prior period. Revenue in Europe was higher as a result of good growth in both U.K. divisions, as well as progress in Poland, although margins were affected by higher raw material costs, and trading conditions in Greece remain difficult as a result of the economic environment. Current period results for Europe include a full six-month contribution from St Tropez versus two months post acquisition in the comparative period. The overall half-on-half impact of rises in key raw materials was an oncost of approximately £20 million. Overall exchange rate impact for the group in the period resulted in a decrease in revenue and profitability of circa £8 million and £1.1 million, respectively.