PZ Cussons Trading Update Sees Steady Half Year Results

PZ Cussons Plc announced its trading update for the half year to November 30, 2013. The overall performance of the company for the first half of the year has been in line with management expectations, as revenue and operating profit were 4% and 6%, respectively, higher than the comparative period. Performance in Africa and Europe offset the impact of weakening in Asian currencies, and excluding the impact of exchange rates, revenue and operating profit were 6% and 8% higher.

In the U.K., performance in the washing and bathing division has been robust with new product launches key to attracting consumers and helping to differentiate PZ Cussons' brands in a competitive trading environment. A highlight during the period has been the relaunch of the premium Imperial Leather Foamburst shower range with new imagery and fragrances. All four brands in the beauty division performed well. St Tropez, in particular, benefited from the appointment of Kate Moss as a brand ambassador at the start of the summer and has seen distribution expand further in overseas markets. Performance in Poland was strong in both home care and personal care, and Greece performed well with growth being achieved versus the comparative period.

For the Asia region, underlying performance in the Australian home care and personal care portfolios was good, with the key Morning Fresh and Radiant brands performing well. In Indonesia, the Cussons Baby range has continued to deliver double-digit local currency revenue growth albeit at a lower rate as a result of the slowing macro environment. Similarly, results have been affected on conversion by the significant weakening in the rupiah. Further progress has been made in the period with the expansion of the Asian brand portfolio into neighboring geographies.

In regard to the Africa region, at a macro level, high interest rates in Nigeria helped maintain the stability of the naira to the U.S. dollar exchange rate, although this has resulted in liquidity levels in the market remaining tight. In the north of the country the trading environment has slightly improved despite ongoing disruption. Overall, the positive growth momentum seen in the second half of last year has continued into the first half, supported by significant new product launches across the personal care, home care and electricals portfolios. Revenue in Ghana and Kenya is ahead of the prior period, although the Ghana results have been impacted by the significant weakening in the cedi.

For PZ Cussons, the trading environment in most markets remains challenging, and in particular in Asia as a result of ongoing currency weakness. Despite this, brand renovation and innovation continues to drive organic revenue and profit growth across the company.

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