Last checked at 29 Sep 2008 07:00
29 September 2008
PZ Cussons Plc
(the "Group")
Interim Management Statement
PZ Cussons Plc today issues the following interim management statement which covers the period 1st June 2008 to 28th September 2008, in advance of its Annual General Meeting, to be held at 12 noon today.
Overview of financial position and performance
The Board is pleased to announce that the performance of the Group during the period has been in line with management expectations. The financial position of the Group remains strong with cash generation during the period also in line with expectations.
The trading outlook for the full year remains positive despite the uncertain and volatile wider economic picture both in the UK and globally.
Regional Reviews
An update of performance and major projects, in particular in the Group's main markets of Nigeria, Indonesia, Australia and the UK is set out below.
Africa
In Nigeria, the Group's main market, the political environment remains stable one year on from the last elections which saw the transition from one democratically elected president to another. Economically, the oil price rise has allowed significant foreign exchange reserves to be accumulated and a small proportion of this is being passed down into the economy. This tight management of the country's wealth is building the platform for future growth. In the short term, Nigeria remains reasonably cushioned from the effects of the global credit crunch, with net consumer wealth continuing to increase as a result of wage rises outstripping cost inflation. Our businesses continue to perform well with strong growth in Home Care, Personal Care and Electricals. The Nutrition business, which is experiencing significant swings in milk costs, is anticipated to move into profitability in the second half of the financial year.
The two major investment projects in Nigeria are on schedule. Firstly Project Unity, which is the £39m investment in our core manufacturing facilities, is well underway and will increase the capacity of our factories and upgrade their efficiency to world class standards over the next three years. And secondly, completion of the new Nutrition factory is on schedule for commissioning early in 2009 and will provide manufacturing capability for a brand new range of products in UHT format.
Asia
Whilst the market in Australia continues to be challenging as a result of the competitive environment being driven by the two major retailers, investment in our brands and in margin improvement programmes in the first quarter will provide a strong foundation for the full year.
In Indonesia, the baby brand has experienced good growth in the first quarter and continues to strengthen its number one position in the market.
Europe
Performance of the UK business continues to be strong across the portfolio of Imperial Leather, Original Source, Carex, Charles Worthington, The Sanctuary and Morning Fresh brands.
There is a strong pipeline of innovative new products across all brands with a large number of new products already launched since the start of the financial year. This innovation is ensuring good growth despite the worsening consumer economic environment and increasingly challenging trade negotiations. The Sanctuary, purchased in January 2008, also continues to perform well building on its strengths of continued brand innovation supported by a loyal consumer base.
Construction of the Group's 'Personal Wash Centre of Excellence' in Manchester, incorporating a new manufacturing facility, a Research and Development Centre and a Fragrance Development Centre, is on schedule. Production has commenced at the new manufacturing facility with the remaining production being transferred by the end of the calendar year. The remainder of the facilities will be completed early in 2009.
Operational Board and PLC Directors
As highlighted in July, an Operational Board has been created to support the PLC Board in the operational management of the Group's businesses. As part of the planned development of the senior management structure, Graham Calder, Deputy Chairman, will move to a part-time basis with effect from 1 December and Sam Plant, Head of Corporate Services on the Operational Board, has assumed the role of Company Secretary.
Summary
The overall performance and position of the Group at the end of the period is in line with the Board's expectations.
The trading outlook for the full year remains positive in all territories. Margin improvement initiatives are in place to mitigate the continued increases in raw material prices which, despite the recent fall in the oil price, remain volatile and well ahead of last year.
Currencies are also volatile, although the strengthening of the dollar versus sterling will benefit the Group's results on translation should this continue for the remainder of the year.
Overall, we remain cautiously optimistic for the full year outturn despite the uncertain global economic picture.
A further update on the Group's performance will be given in the interim financial statements for the six months to 30th November 2008, to be announced at the end of January 2009.
- Ends -
For further information contact:
PZ Cussons Plc Tel: 0161 491 8000
Graham Calder / Brandon Leigh
Hogarth Partnership Limited Tel: 020 7357 9477
John Olsen / Sarah MacLeod