PZ Cussons Plc issued a trading update for the year ended May 31, 2013. The board announced the performance of the company for the year has been in line with management expectations, delivering a return to profitable growth for the year. Revenue and profit growth has been achieved in all three regions of Europe, Asia and Africa. The financial position of PZ Cussons remains strong with good cash generation and only a small net debt position at the year end.
In the U.K. washing and bathing division, an ongoing program of new product development has ensured that the core brands of Imperial Leather, Carex and Original Source have continued to perform well despite intense promotional activity in the trade and a challenging consumer environment. Cussons Mum & Me, the company's new range of products for mother and baby, has seen sales rates continuing to build as new customers are attracted to the brand.
In the beauty division, growth has been achieved in existing markets through new product launches and expansion into new distribution channels, as well as entry into new overseas markets such as Poland, Germany and Canada. Last month, the division announced the appointment of Kate Moss as the new face and body of St Tropez. Sales rates have already responded positively following an extensive PR campaign both in the U.K. and overseas and the roll out of new in-store imagery. Last month also saw the launch of a new range of products under the Sanctuary Active Reverse range with Darcey Bussell continuing as brand ambassador.
The company's performance in Poland remains strong in both home care and personal care, and despite the difficult external environment, PZ Cussons' small Greek business remains profitable, although at lower levels than the previous year.
The Australian business has now moved firmly back into profitability following the successful restructuring of the business last year. Both the home care and personal care portfolios are performing well despite the tough trading environment.
The Indonesia business has delivered another year of double-digit revenue growth although a weaker rupiah and high wage inflation have limited the growth in profitability. Revenue growth has been achieved in both the baby care and non-baby care portfolios as well as through wider distribution into new markets such as the Philippines, Myanmar and Vietnam. Overall trading in the smaller territories of Thailand and the Middle East has been in line with expectations, as well.
In Nigeria, unrest in the north of the country has continued, with both domestic sales and exports being affected during the peak trading season. Nevertheless, the trading environment in the rest of the country has been more robust with no further fuel duty related impact taking place, resulting in an overall increase in sales in the second half of the year. Performance in the smaller territories of Ghana and Kenya has been in line with expectations.
Across the company, the focus remains on driving revenue growth through brand innovation and renovation, so that its brands continue to stand out successfully in the tough trading environments that exist in most of the markets that PZ Cussons operates in. At the same time, margin improvement initiatives will continue in all areas of the business. The benefit of these will enable further investment to be made in new product development and brand support whilst continuing to deliver a sustainable growth in profitability.
