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Anyone else noticed the steady upward progress of PZC over recent months?
Shore Capital reiterated its "sell" recommendation for PZ Cussons (PZC), noting concerns over its short-term prospects. The personal healthcare company continues to suffer from civil unrest in Nigeria and the broker also pointed to difficult trading in the UK, leading it to downgrade its forecasts. However, Shore noted that the firm has attractive growth opportunities in the medium-term in countries such as Indonesia and that any improvement to conditions in Nigeria could have a dramatic impact on the group. The shares gained 2.1p to 314.6p.
Imperial Leather soap maker PZ Cussons is confident of a return to profitable growth this financial year, though conditions remain difficult in its core market of Nigeria and challenging elsewhere. In a statement covering trading since June 1st, the group revealed that unrest in the north of Nigeria has continued to affect sales rates, while consumer disposable income remains affected by the removal of part of the fuel subsidy in January. On the bright side, margins in Nigeria have improved as a result of lower raw material costs and margin improvement projects. In the UK, trading in the washing and bathing division has been robust despite continued high levels of promotional activity in the trade. The group sees new product launches as the key to deterring consumers from trading down to own-brand products, and the next few months will see the launch of new Imperial Leather limited edition shower and bath products, and a new seasonal edition of Original Source. The Cussons Mum and Me range, targeted at the mother and baby market, achieved full UK distribution by the end of July, and early sales rates are encouraging following an advertising blitz in August. In the beauty division, the poor summer weather in Europe adversely affected sales of St Tropez, but the other brands in the portfolio have performed well, the group said. Performance in Poland has been strong while trading conditions in Greece remain difficult.
Outlook Across the Group, the focus remains on driving profitable growth through brand innovation and renovation, and through improving margins via further cost reduction initiatives. The major supply chain optimisation project, announced in March, is on track to significantly reduce the overhead footprint of the Group's manufacturing activities, and the benefits will be seen in the current financial year. Whilst input costs have shown signs of short term easing, they remain volatile and in some cases close to their highest levels. The balance sheet remains strong with only a small net debt position and the Group is well placed to pursue further growth opportunities which fit its strategic aims. Last year's underlying revenue growth across the business, particularly in the UK, in the Beauty division and in Indonesia, together with the new Cussons Mum & Me and Fudge ranges, have provided encouraging momentum into the current financial year. As a result, overall performance since the year-end has been in line with expectations. Clearly the world remains uncertain and volatile. However, consumer demand for high quality innovative products serving day to day needs continues, and we are well placed to serve those needs with a strong distribution footprint in key geographic markets. Whilst the situation in the Group's important Nigerian market remains fragile, the Board is confident of a return to profitable growth in the current financial year.
Commenting today, Richard Harvey (Chairman) said: "The Group delivered revenue growth despite challenging trading conditions. Profits were lower with a robust performance in the UK, strong trading in the Beauty division and positive momentum in Indonesia, more than offset by specific market challenges in Nigeria and Australia, and the impact of the largest year-on-year increase in raw material costs we have experienced. Despite the external challenges, the Group remains committed to driving profitable growth through brand renovation and innovation, and through further cost reduction. During the year, underlying revenue growth continued across the business, particularly in the UK, in the Beauty division and in Indonesia. As we start the current financial year this momentum, together with our new Cussons Mum & Me and Fudge ranges, will help to ensure this growth continues. Our exciting joint venture with Wilmar is on track with the Nigerian palm oil refinery due to be completed by the end of the calendar year. At the same time, we are working actively to reduce our cost base, and the supply chain optimisation project announced in March will significantly reduce the overhead base of our manufacturing activities. Our balance sheet remains strong with only a small net debt position and this gives us the capacity to pursue further investment opportunities which fit our strategic aims. Clearly the world remains uncertain and volatile. However, consumer demand for high quality innovative products serving day to day needs continues, and we are well placed to serve those needs with a strong distribution footprint in key geographic markets. Whilst the situation in the Group's important Nigerian market remains fragile, we are confident that the Group will return to profitable growth in the current financial year. Overall performance since the year-end has been in line with expectations."
Highlights Group § Revenue growth of 4.7% despite challenging trading conditions during the year, particularly in Nigeria and Australia § Profits impacted, as previously advised, by high raw material costs; a worsening trading environment in the Australian homecare category; and the social and economic tensions in Nigeria § Major launch in the UK, post period end, of Cussons Mum & Me, a new brand of personal care products specifically designed for mothers and babies § Extension of the Beauty division portfolio with the acquisition of the Fudge hair-care brand in January 2012 § Supply chain optimisation project underway to significantly reduce the overhead footprint of the Group's manufacturing activities § Healthy balance sheet with only a small net debt position at the end of the year § Total dividend increased 1.6% year on year reflecting the strong balance sheet and the Board's confidence in the future
http://www.investegate.co.uk/Article.aspx?id=201207240700042851I
wants a lot of this company. Some African Fund, I think they are called Templeton, or Trumpton, I can't remember.
That this share is going to put on some weight over the next few days. Someone needs shares?
lex Kanellis, Chief Executive of PZ Cussons Plc, said: "The acquisition of Fudge further strengthens our newly formed beauty division and broadens its category participation. The geographic and distribution footprint of Fudge is a perfect fit with the current brand portfolio and we see further opportunity to develop the brand's international potential. Following this acquisition our balance sheet remains strong giving us flexibility for further investment opportunities as they arise." Michelle Feeney, Chief Executive of PZ Cussons Beauty, said: "We are delighted to be acquiring such a young, vibrant brand and I am very excited about its prospects and untapped potential. Fudge is a natural fit for our portfolio as we continue to bring well-loved brands back to the forefront and make beauty accessible to all."
ACQUISITION OF FUDGE HAIR CARE BRAND PZ Cussons Plc, a leading consumer products group in Europe, Asia and Africa, announces the exchange of contracts for the acquisition through its beauty division of the Fudge hair care brand from Australian-based Sabre Group. The brand and associated inventory are being acquired for a consideration of £25.5m in cash with completion expected by the end of January following the satisfaction of certain regulatory obligations. Established in 1991, Fudge is a leading premium hair care brand, sold predominantly through salon distribution in the UK, Australia and New Zealand. It is best known for its styling range including the iconic 'Hair Shaper' product. Fudge will join the portfolio of brands within PZ Cussons Beauty, the group's recently formed beauty division, which currently comprises St Tropez, Sanctuary and Charles Worthington. Revenue for the year ended 30 June 2011 was £15.7m. Approximately 50% of Fudge sales are currently in the UK and Europe and 50% in Australia and New Zealand.
http://www.investegate.co.uk/Article.aspx?id=201201050700050084V
PZ Cussons is of course a superbly run company and has been a fantastic long term investment for me.However owning shares should in my opinion be an issue of seeking value especially in relation to the PE ratio. I believe the shares are now too expensive on a PE ratio of 25 but I am reluctant to take my profits because of the significant CGT liability. The Times were talking nonsense in relation to always being on a PE ratio in the twenties. When I purchased my shares in the company in the late 1990's the company was on a low PE of around seven and was called Paterson Zochonis.
PZ Cussons should really not be doing as well as it is. Best known as the maker of Imperial Leather and Carex soap and for having, for historical reasons, a large trading operation in Nigeria, the company hit a number of headwinds in the last financial year. The looming Nigerian elections meant some disruption to sales there. The company faced significant input cost increases from anything from palm oil and tallow to packaging. In the event, the elections in Nigeria came and went and trading picked up again, even if operating profits from Africa, almost two fifths of the total in the year to the end of May, were down a little. In Europe, the company responded by heavier promotions and reckons to have grown its market share in its core washing and bathing market from 21% to 25% over the year. The shares, more than half of which are owned by the founding Zochonis family, have always sold on a multiple of above 20 times’ earnings and are currently on almost 25 times’ this year’s forecast. Hold, says the Times.
sheffieldowls - hi - I am not currently a holder in Lamprell although I have been in the past. I do hold here but as its only from earlier this year then I have someway to go to match your profit! Likewise I have held Coal of Africa but not currently although it is one of many on my watch list. GL ( if I reach 1000% profit here and you are still holding then I guess you will be having one almighty party! )
New products boost PZ Cussons Date: Tuesday 26 Jul 2011 LONDON (ShareCast) - Soapmaker PZ Cussons said new product launches have been helping it win market share in the UK as it reported a rise in profits for the year to 31 May. Pre-tax profits rose to £108.1m from £101.8m in the same period last year, on revenues that climbed to £820.7m from £771.6m. In Africa, source of most of the company’s revenues, sales rose to £339.1m from £325.2m. Nigeria is benefitting from stability now following the re-election of the incumbent president, the company said, with high oil prices also giving the economy a boost. PZ Cussons sells personal and home care products and electrical items in Africa. Europe revenues rose to £305.5m from £280.8m, helped by product launches in Britain. The Carex and Original Source ranges have been extended, PZ Cussons said. “Asian” revenues rose to £176.1m from £165.6m, with strength in Indonesia offsetting a subdued performance in Australia, where the consumer is coming under pressure.
I know you contribute to the Lamprell board so I find it interesting that you also own shares in PZ Cussons. What a fantastic long term investment it has been with this company. I am up well over 1000% on my investment excluding dividends since becoming a shareholder over twelve years ago. It is my third largest holding after Lamprell and Coal of Africa. Are you aware that FT contributer and former minister John Lee has this as one of his largest holdings. I believe that this is a share to hold rather than buy at the present level though Paul Hill in Moneyweek magazine thought it was a sell a few months back because of its lofty rating on 20 times forward earnings. I would not dream of selling in part because of my CGT liability on my holding of 250000 shares.
Yesterday’s update from the maker of Imperial Leather soap and Carex handwash was reassuring in that, overall, PZ Cussons said performance for the year to the end of May had been in line with management’s hopes. PZ Cussons is better placed than other consumer-related companies in that it has the benefit of good international operations. That said, it trades on more than 20 times forward earnings. We would not buy, but nor are we inclined to sell. The Independent recommends a hold.
The performance of PZ Cussons (PZC) for the full-year has been in line with management expectations, the soap and shampoo maker announced, despite weak consumer demand in developed markets and high raw material costs. The group added that the outlook for its more premium brands in the UK and for growth in emerging markets remains positive. Shares in PZ, which has operations in Africa, Asia and Europe, advanced 6.8p to 376.6p.
Tomorrow 09/06/2011. PZ Cussons issued a gloomy update in April, with rising raw material costs plaguing the soap maker. Things have been tough in the UK, particularly in areas such as shower gels and hand wash, and even worse in Greece, where the company also has a presence. Even Australia, which has fared much better than other Western economies since the credit crunch thanks to its large mining industry, has seen its consumer environment tighten. Thursday’s trading statement should have some more clues on consumer sentiment.
Asia a bright spot for PZ Cussons Date: Thursday 14 Apr 2011 LONDON (ShareCast) - More evidence of the threadbare state of the UK consumer's wallet came from consumer goods outfit PZ Cussons, which said trading conditions in the UK remain challenging. Though the group as a whole has been trading broadly in line with management expectations in 2011, despite margin pressures from burgeoning raw material costs, things have been tough in the UK, particularly in areas such as shower gels and hand wash. On the bright side, the top end of the market in the UK, served by the group's brands such as The Sanctuary, St. Tropez and Charles Worthington, have continued to perform well. Elsewhere in Europe, trading conditions in Greece and Poland have also been challenging, but the picture is a lot rosier in Asia, which “continues to perform strongly,” the group said, even though the Australian consumer environment has got tighter. In the group's historical heartland of Nigeria underlying sales rates have improved this year but the group expects some disruption to trading this year from the Nigerian election, which coincides with what are traditionally peak sales months for PZ Cussons. “The trading outlook for the remainder of the current financial year remains challenging and is expected to be impacted by the UK trading environment, the temporary delay to Nigeria's election process and continued high levels of raw material costs,” the group said. “These factors will be partially offset by the resilience of our more premium brands in the UK, by the growth in Asia and by the underlying improvement in demand in Nigeria, all of which give cause for encouragement for the next financial year,” the statement added.
Outlook The trading outlook for the remainder of the current financial year remains challenging and is expected to be impacted by the UK trading environment, the temporary delay to Nigeria's election process and continued high levels of raw material costs. These factors will be partially offset by the resilience of our more premium brands in the UK, by the growth in Asia and by the underlying improvement in demand in Nigeria, all of which give cause for encouragement for the next financial year. A further trading update will be made on 9th June 2011 after the close of the financial year.
http://www.investegate.co.uk/Article.aspx?id=201104140700088629E
Goldman Sachs , a neutral for PZ Cussons, cutting target to 383p from 433p
Panmure Gordon maintained its "buy" recommendation for PZ Cussons (PZC), the personal and household cleansing products manufacturer, with a reduced target price of 365p, down from 400p. While first half growth was lower than normal, the broker continues to forecast double-digit earnings per share growth this year despite increasing cost headwinds. The joint venture with Wilmar in Nigeria and the new PZ Cussons Beauty division, Panmure added, has established new growth platforms for a business that should continue to deliver consistent double-digit growth. Shares in PZ edged ahead 2.35p to 347.85p.