PZ Cussons hit by tough trading conditions in Africa but claims growth is returning

By Andrew MCDOUGALL

- Last updated on GMT

PZ Cussons hit by tough trading conditions in Africa but claims growth is returning

Related tags Marketing

PZ Cussons says it will focus on and remains confident of a strong recovery after pre-tax profit and sales dropped, with the falling oil price, weak currency and the threat of violence in Nigeria taking their toll.

The maker of Imperial Leather reported in its annual results that pre-tax profit has decreased 32% to £84 million (€119m) and sales fell nearly 5% to £819million.

Overall like-for-like sales did grow 2.3% thanks to demand for the St Tropez and Sanctuary brands in the UK, particularly with the launch of a new St Tropez shower gel tanning product which has been popular and the company now expects sales of 1m bottles; above the original forecast of 30,000.

“Performance since the year-end has been in line with expectations,”​ says company chairman Richard Harvey.

“Whilst the outlook remains challenging, the Group’s focus on its values, robust long-term strategy, our innovative product pipeline, and the strategic steps we have taken, provide a strong and exciting platform for future sustainable growth.”

Challenges

Whilst in the UK the Washing and Bathing division is performing well driven by its innovation pipeline and thanks to the good performance in Beauty division by the aforementioned brands above, sales have been down in the market in Asia, and Africa has proved even more challenging.

Around 40% of the group’s sales come from Africa and Nigeria is its biggest market on the continent; but it is in this region that the company has seen the most instability due to the ebola outbreak, terrorist threats, presidential elections and a significant currency devaluation hitting the country’s economy.

PZ Cusson management stresses, however, that having been in the market for a very long time it expects growth will return to previous levels, particularly in NIgeria despite tough trading conditions during the year.

“Despite tough trading conditions, particularly in our largest market Nigeria, underlying revenue and operating profit grew 2.3% and 2.7% respectively, and our market share positions were either held or grown in our core categories,”​ says Harvey.

Related topics Business & Financial