PZ CUSSONS PLC Trading Update (2848Z)
14 December 2017 - 6:00PM
UK Regulatory
TIDMPZC
RNS Number : 2848Z
PZ CUSSONS PLC
14 December 2017
14 December 2017
PZ Cussons Plc
(the "Group")
TRADING UPDATE
PZ Cussons Plc announces its trading update in respect of the
half year to 30 November 2017.
Overview
Revenue for the half year to 30 November 2017 was slightly
higher than the prior period with performance underpinned by a
robust and innovative product pipeline.
First half operating profits will be approximately 10% lower
than the previous period with strong profitability in Asia offset
by reduced margins in some business units in Europe and in
particular Africa as a result of the economic environment and
competitive trading conditions.
Performance in these business units is expected to improve in
the second half as a result of new product launches and
distribution expansion, together with the usual seasonal uplift in
Nigeria.
Brand initiatives planned across the Group for the second half
are expected to deliver a full year outturn broadly in line with
the prior year.
The Group's balance sheet remains strong with the seasonal
increase in working capital in Nigeria expected to unwind during
the second half.
First half trading
Europe
In the UK, consumers are shopping cautiously reflecting general
cost inflation outstripping wage growth, and broader economic
uncertainty. This has created tough conditions in the trade in the
first half which has adversely affected performance. Further brand
initiatives are planned for the second half across Imperial
Leather, Carex and, in particular, Original Source.
Performance in the Beauty division has been robust across
Sanctuary, St Tropez, Charles Worthington and Fudge. The new
millennial Sanctuary Being range is now in store in the US and
Canada in addition to its UK distribution.
Performance in the smaller markets of Poland and Greece has been
in line with expectations.
Asia
In Australia, profitability has improved across all categories
of Personal Care, Home Care and Food & Nutrition, continuing
the positive momentum of the second half of the prior year.
In Indonesia, profitability has also been good with mix
improvement across both the core Cussons Baby range as well as from
recent new product launches under Imperial Leather and Cussons
Kids.
Performance in the smaller markets of Thailand and the Middle
East has been in line with expectations.
Africa
In Nigeria, the Naira has been stable against the US dollar on
the interbank market and has strengthened slightly on the secondary
market as a result of improved dollar liquidity levels. However,
Naira credit availability in the trade has been tight during the
first half and the environment for consumers remains challenging
following the very significant cost inflation of recent years.
Performance in Personal Care and Home Care and in the PZ Wilmar
joint venture has been robust. Tougher trading conditions have been
evident in sales of bulk milk as a result of competitor pricing
pressure and in Electricals which is reliant on discretionary spend
affordability, with profitability in these business units
significantly impacted in the first half. A number of initiatives
across the Nigeria business, including distribution expansion and
new product launches, are planned for the remainder of the year to
improve performance as the business enters peak season.
Performance in the smaller markets of Ghana and Kenya has been
in line with expectations.
Full year outlook
The strength of the Group's brand portfolio and innovation
pipeline continues to ensure that the market shares of our products
remain strong in all markets.
Whilst tough trading conditions are expected to continue for the
full year with the consumer under pressure in all markets, brand
initiatives planned for the second half are expected to deliver a
full year outturn broadly in line with the prior year.
The Group's balance sheet remains strong and well placed to
pursue new opportunities as they arise.
Interim Announcement
Interim results for the half year to 30 November 2017 will be
announced on Tuesday 30 January 2018.
Notes
1. Financial results for the Nigeria listed entity will be
released in Nigeria today in accordance with local market
requirements and in line with the commentary provided above.
- ENDS -
For further information contact:
PZ Cussons Plc Tel: 0161 435 1236
Brandon Leigh - Chief
Financial Officer
Instinctif Tel: 020 7457 2020
Tim Linacre / Guy Scarborough
This information is provided by RNS
The company news service from the London Stock Exchange
END
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