By Neil Maidment
LONDON Jan 21 British soap and shampoo maker PZ
Cussons said its first-half performance was hurt by weak
emerging market currencies that showed no signs of improving,
prompting a fall in its shares as some analysts cut their
Cussons, the maker of Imperial Leather soaps, nevertheless
posted a 7.9 percent rise in pretax profit to 47.6 million
pounds ($78.16 million) for the six months to Nov. 30 - in line
with expectations - on sales up 4.1 percent to 431.8 million.
But it said that performance was affected by weak Asian
exchange rates, particularly the Australian dollar and
Indonesian rupiah, which shaved 2 percent off revenue growth. It
added that while trading had been in line since the end of the
first half, emerging market currencies remained under pressure.
The group, whose largest market is Nigeria, made around 22
percent of its revenue in Asia in 2013.
The firm's shares fell 2.5 percent to 386.3 pence at 1152
GMT, against a broadly flat FTSE 250 index, with analysts noting
that broker Panmure Gordon trimmed full-year forecasts.
"Given the building currency headwinds, we are cutting our
full-year pretax profit forecast from 119.1 million pounds to
116.5 million pounds," analysts said in a note.
PZ Cussons said that despite "challenging markets" it saw
good prospects for continued growth, supported by a focus on new
and improved product ranges in order to grow sales.
It raised its interim dividend by 7.7 percent to 2.53 pence.
A new product push underpinned sales growth in the group's
core markets and the appointment of Kate Moss as its St Tropez
brand ambassador had boosted sales of the tanning products
"probably 10 percent more than they would have been", according
to Chief Financial Officer Brandon Leigh.
Leigh said new and relaunched products - such as its
Imperial Leather Foamburst shower range and Carex handwash - had
proved effective in attracting squeezed consumers into making
purchases and seeing off increasing competition.
The UK market in particular had put in a "robust"
performance, Cussons said, while in Nigeria, which makes up 90
percent of its sales in Africa, growth was improving across all
The group said it expected to expand its Australian baby
food business Rafferty's Garden, bought last year for 42.2
million pounds, into New Zealand in the first half of 2014, and
into some Asian cities during the second half.
The company also said it anticipated a decision from
regulators on whether to sanction the 46.6 million pound sale of
its Polish home care business to Henkel within the next month.