Pz Cussons Regulatory News (PZC)

25 Sep 2006 12:00

PZ CUSSONS PLC25 September 2006 For immediate release Monday 25 September 2006 PZ Cussons Plc Chairman's Statement to Shareholders at Annual General Meeting Anthony Green, Chairman of PZ Cussons Plc, will make the following statement toshareholders at today's Annual General Meeting. "As you are aware 2006 has been another year of successful development of thegroup with operating profit before exceptional items reaching £60.2m, anincrease of 13%. This reflected good performances in all key territories, andparticularly Nigeria, together with the elimination of losses incurred last yearin Russia. At a corporate level, following approval of the enfranchisement of the 'A'non-voting shares and the repayment of preference share capital in June 2005,the board is now proposing to shareholders at this meeting that a share split isundertaken to subdivide the current Ordinary shares into 10 new Ordinary shares. The reason for this is that we do believe that having a larger number of shareswith a lower nominal value will assist in improving their liquidity as well assupporting the retention and widening of what already is a diverse shareholderbase. Let me now turn to our markets, starting with Nigeria. There, I am very glad tosay that the political and economic situation has remained stable throughout theyear and we look forward to the continuation of this after the forthcomingelections in the spring of 2007. Nigeria is also benefiting from the continuinghigh price of oil as well as increased foreign investment in areas such astelecoms and gas exploration. Not surprisingly this does mean that there is nowincreased competition in terms of both our new business ventures and thedevelopment of our current brand ranges. I must stress however that we do havevery great strengths with over 100 years' experience, a formidable distributionsystem with depots throughout the country and a highly capable and motivatedmanagement team. I would therefore like to update you on the key initiatives which our Nigerianbusiness is undertaking: Firstly, in terms of the core businesses of soaps, detergents and health andbeauty products, strong brand renovation and a sustained margin improvementprogramme continue to support our business growth. In addition, we arecontinuing to invest significantly in our manufacturing sites by increasingcapacities and investing in infrastructure, such as our own gas power generationcapability which is now fully on stream. Secondly, our electrical goods business, HPZ, which is run in conjunction withour Chinese partners Haier, has, for the second year running, experiencedsignificant growth, with considerable consumer demand for fridges, freezers,air-conditioners and other electrical products, a sign that consumer spendingpower is increasing. This growth is continuing into the current financial year. And thirdly, our joint venture with our Irish partners Glanbia is progressingextremely well. The milk factory which is of a standard comparable to anythingin Europe or the United States was opened by the Nigerian President HisExcellency Olusegun Obasanjo late last year and is producing both powdered andevaporated milk and sales continue to exceed expectations. Work has now begun toextend the current milk factory to provide additional capacity and plans toinvest in the development of further nutritional products are at an advancedstage. Let me turn now to Asia; in Australia turnover and profitability improved lastyear despite increases in raw material and freight costs. The newly acquiredTrix dishwash brand grew our total dishwash market share and is now successfullyintegrated within the business. Trading in Indonesia was challenging last yearon both the demand and supply side with pressure on consumer disposable incomeand higher raw material and energy costs. Focus this year in Indonesia is on thecore ranges such as Cussons Baby which has a number one position in terms ofmarket share and both turnover and profitability are improving. Our new Groupbar soap factory in Thailand was successfully commissioned on time last year andis already supplying soap to both the UK and Australian markets. Turning to Europe; In the UK, the consumer market as ever remains pricecompetitive, with increasing levels of promotional support necessary. I am verypleased to advise however that results for the first three months are in linewith expectations and our major brands continue to gain market share throughinnovative new product launches. In particular, the roll out of the CharlesWorthington haircare range to the nationwide trade is progressing to plan with afavourable consumer response. As disclosed in the Annual Report and Accounts,the group will be constructing a new, purpose built liquids factory in NorthManchester. Following the elimination of losses last year in Poland, the current year isalso progressing to plan. The Greek business has seen the launch of newproducts, such as Minerva Benecol margarine, and turnover is growing. We are recommending a final dividend of 29.5p per share, which, together withthe interim dividend of 9.3p means an increase of 10.1% on last year.Turning to the current financial year I am delighted to advise that at the endof the first quarter the Group operating results are in line with budget. Our Group has continued to lay the solid foundations for our future growthparticularly in Nigeria, UK, Australia and Indonesia, in other words, our majormarkets. Our focus remains on selected markets, leading brands and first classdistribution. We also continue with a sustained margin improvement programme tocounter ongoing cost increases and the weak dollar. We fully realise there are therefore exciting and significant growthopportunities that are open to us and, together with a strong balance sheet, weface the future with considerable optimism. Finally, as I said last year, our business like any business at the end of theday is about people. With the growth that we have planned the recruitment,training and retention of top quality people again becomes ever more importantand we are giving top priority to specific personnel development programmes. I would like to close by thanking all our staff throughout the Group whose hardwork and dedication has made these results possible." For further information contact Graham Calder, Deputy Chairman 0161 491 8000 PZ Cussons Plc Terry Garrett / John Moriarty 0207 067 0700 Weber Shandwick Square Mile This information is provided by RNS The company news service from the London Stock Exchange