PZ Cussons’ profits rise but revenues flat on currency impact

By Katie Nichol

- Last updated on GMT

Related tags Profit

PZ Cussons has reported a rise in annual profits while adverse currency impacts and a lack of liquidity in Nigeria led to a slight drop in reported revenues.

The UK-based consumer goods company, which manufactures the Carex and Imperial Leather soap brands, reported annual revenues of £771.6m (€920.2m) for the period ending 31 May 2010, a decrease of 1.3 per cent.

Operating profit came in at £101.4m, a rise of 11.8 per cent on the prior year figure of £90.6m.

“The Group has delivered a strong performance with profitable growth in all three regions of Africa, Asia and Europe,”​ said PZ Cussons’ chairman Richard Harvey.

“A clear focus on the strategy of selected markets, leading brands, a world class supply chain and a great team of people has enabled continued sustainable profitable growth through a challenging trading environment,”​ he added.

Growth across three core regions

Breaking the results down according to the company’s key regions, Asia performed particularly well, with revenues coming in at £165.6m compared to £135m last year, and an increase in profitability across Indonesia, the Middle East and Australia was highlighted.

The Personal Wash category has continued to develop in Australia through a series of new launches, and Original Source will be launched in the market in November, the company said. Baby Care in Indonesia has continued to perform strongly, with a relaunch of the Cussons Baby range imminent in order to maintain the momentum in this category.

Sales in Europe, the company’s second biggest market, were £280.8 compared to £288.1m in 2009. PZ Cussons said despite an uncertain consumer outlook, ‘strong growth’ in UK profits was witnessed, and progress continued in Poland.

In the UK, new launches from brands including Imperial Leather, Charles Worthington and The Sanctuary helped to contribute to a strong performance, the company said. A partnership with Ecolab is currently being developed which will see Carex and Imperial Leather supplied into branded dispensers in Premier Inn and Holiday Inn hotels across the UK.

PZ Cussons said that although operating profit in Africa increased, a temporary lack of liquidity due to tighter banking controls in Nigeria and negative currency impact saw revenues drop to £325.2m from £358.7m last year.

Future outlook

The company said that the outlook for the rest of the year is positive despite uncertainties surrounding consumer spending patterns.

“Overall performance since the year-end has been in line with management expectations. We look ahead with cautious optimism and an entrepreneurial spirit despite an uncertain consumer outlook in a number of markets,” ​it was said in a statement.

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