PZ Cussons Plc issued the following interim management statement, which covers the period January 30, 2013 to April 10, 2013. The performance of the company during the period has been in line with management expectations, and its financial position remains strong with cash generation during the period also in line with expectations.
In the U.K. washing and bathing division, the core brands of Imperial Leather, Carex and Original Source performed well despite intense promotional activity in the trade and a challenging consumer environment. Sales of Cussons Mum & Me, the new range of products for mother and baby, have been encouraging with sales rates building on a monthly basis.
Also, the beauty division performed well during the period, with growth in international markets compensating for a tougher trading environment in the U.K. Sales of St Tropez in the U.S. have continued to grow and, during the period, the brand has been launched into further export markets including Poland and Germany. Trading in the Group’s smaller Greek business remains difficult as a result of the wider economic backdrop.
For its Asia business, while trading conditions in Australia remain challenging, the company has now moved back into profitability with both the home care and personal care portfolios performing well. Continued positive momentum in Indonesia has delivered another period of revenue growth although a weaker rupiah and high wage inflation have limited the growth in profitability. Wider distribution of the Indonesian brand portfolio into the Philippines and Myanmar has gained momentum during the period, with a launch of the Cussons Baby brand planned for Vietnam in the coming months. Overall trading in the smaller territories of Thailand and the Middle East also has been in line with expectations.
In Nigeria, while unrest in the north of the country has continued to affect sales, the trading environment in the rest of the country has been more robust with no further fuel duty related impact taking place during the period. Construction of the palm oil refinery with Wilmar in Nigeria has now been completed on time and to budget, and production commenced in the period. Sales of bulk oil have already begun and the new consumer food ingredients brand will be launched in June. And performance in the smaller territories of Ghana and Kenya has been in line with expectations.
For its full year outlook, PZ Cussons continues to face challenging trading conditions in most of the markets it operates in, with consumer disposable income remaining under pressure. In the company’s largest market, Nigeria, social unrest in the north continues, and while the environment in the rest of the country is calmer, the potential for removal of the remainder of the fuel subsidy remains.
Against this backdrop, the PZ Cussons continues its focus on brand innovation and renovation in all markets as well as cost optimization in all areas of the business. Results are expected to be in line with management expectations delivering a return to profitable growth for the year.