PZ Cussons gets boost from Kate Moss tanning product

Model Kate Moss has given sales of St Tropez self-tanning lotion an overseas boost, according to PZ Cussons, as the Manchester-based group announced a rise of 6 per cent in operating profits in its first half and a 4 per cent increase in sales.

The maker of Carex and Imperial Leather said in a trading statement that stronger trading in Africa and Europe had offset the impact of weakening currencies in Asia.

Asia accounts for about 20 per cent of sales, with Indonesia and Australia forming 80 per cent of the Asian total. Both the Indonesian rupiah and the Australian dollar have weakened against sterling in the six months to November 30, compared with the same period last year.

In Ghana, where revenues were higher than in the same period last year, the results had been hit by "a significant weakening in the cedi."

There was little currency impact in Nigeria since the naira remained supported by the central bank. PZ Cussons makes 35 per cent of its total sales to Africa - mostly Nigeria - and said the positive growth in the second half of last year had continued.

At constant currencies, sales and operating profits were 6 and 8 per cent higher respectively. PZ Cussons will report its interim results in January.

The family-controlled group said trading was in line with management's expectations but its outlook was cautious.

"The trading environment in most markets remains challenging and in particular in Asia as a result of ongoing currency weakness," it said, adding that innovation would drive organic revenue and profit growth.

The Imperial Leather Foamburst shower range had been a "highlight" of the "robust" sales of washing and bathing products in Europe during the six months, partly because of new fragrances and imagery, it said.

PZ Cussons said its beauty division - accounting for 7 per cent of sales - had also performed well. "St Tropez, in particular, has benefited from the appointment of Kate Moss at the start of the summer and has seen distribution expand further in overseas markets," it said.

Darren Shirley, analyst at Shore Capital, said: "Despite an encouraging operational performance through the first half, given the strengthening second half headwinds, we expect the stock to tread water."

Analysts expect double-digit earnings growth this year, including joint house brokers Panmure Gordon and JPMorgan which both shaved full-year earnings per share forecasts by 1.6 per cent to 18.34 and by 1 per cent to 18.18p. respectively

The shares were down slightly in lunchtime London trading, at 379p.

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