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LONDON (Alliance News) - Creightons PLC Friday reported growth in profit in its recently-ended financial year as it profited from the sale of its Twisted Sista brand and it generated sales growth, although it said it expects pressure on gross margin will likely continue.
The personal care and beauty products maker reported growth in pretax profit in the year ended March 31 to GBP851,000 from GBP471,000 the year before, as revenue rose 9% to GBP21.1 million from GBP19.4 million.
It said it made a GBP375,000 profit on the sale of its 55% interest in the Twisted Sista brand and helped generate sales growth by introducing new product ranges and expanding into export markets, despite facing increased price and promotion pressures from rival brands in a highly competitive retail environment.
However, Creightons did note that profit margins remain under pressure as customers seek to recover lost margin and with sales growth coming from lower-margin products. Gross margin decreased by 1% to 39.8% from 40.8%
The company added that the GBP1 million sale of The Real Shaving Company to Swallowfield PLC in May is also expected to generate a profit of GBP844,000 in the current year, and it intends to use the proceeds to to invest in the development of new ranges and in resources to help improve productivity and staff development.
It said it is finalising plans to invest around GBP100,000 to improve its manufacturing and logistics organisations, which will hit its results for the current year, but will provide it with the structure capable of delivering long-term increases in productivity and capacity while improving competitiveness.
Creightons said it will not pay a dividend for the year but will aim to introduce dividend payments for the current year ending March 31, 2016 should the underlying level of profits and cash generation continue to improve.
"The group continues to develop and strengthen its branded portfolio. This is being achieved through expanding our brand offering and refining the range offering within existing brands. We will also seek to acquire brands which are complementary to our existing portfolio and where our sales, marketing and product development expertise will enable the group to drive growth," Chairman William McIlroy said in a statement.
"We expect our main private label customers to respond to the pressures in the current economic climate with value strategies resulting in sales opportunities, which we intend to exploit with lower priced products to offset lower sales levels on higher priced products. This is likely to result in margin pressure over the coming years. We will continue to manage our overhead cost base and working capital requirements to ensure they are aligned with the anticipated sales levels of the group, whilst retaining the skills necessary to meet growth opportunities as they arise," he added.
Shares in Creightons were trading down 0.6% at 8.70 pence Friday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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