Torrid year for Imperial Leather maker in Africa
IMPERIAL Leather maker PZ Cussons has experienced a torrid year after huge problems with sales in Africa.
Revenue for the year ending May 31 plummeted to £762.6m – down almost six per cent.
Profit before tax dropped from £86.5m this time last year to £66.6m – a staggering fall of 23 per cent.
The Manchester-headquartered group, which is behind brands including Carex, St. Tropez and Sanctuary Spa, has lost a quarter of its market value.
The problems are being blamed on poor performance in its core Nigerian market.
Bosses blame ‘market contraction as a result of lack of liquidity in the trade and reduced consumer disposable income’ but said they hoped next year’s elections would bring some stability.
There were also issues closer to home in Europe, where the washing and bathing division performed worse than last year ‘due to a tighter UK retail landscape.’
However, there was a good performance in the beauty division across all brands and in both UK and US markets.
PZ Cussons said initiatives were underway to strengthen brand portfolios and reduce the company’s cost base.
Caroline Silver, chair of the board, said: “Whilst the group has delivered good profit growth in Asia and a creditable result in Europe, macro-conditions in Nigeria have resulted in a sharp decline in Africa profits for the year and hence a disappointing result for the group as a whole.
“Within Africa, and in particular Nigeria, it is important to note that there has been no structural change in the landscape of the categories in which we operate.
“We remain proud of our brand portfolios across personal care, home care, electricals and food and nutrition and of our extensive manufacturing and logistics capability.
“Within Asia, our businesses in Australia and Indonesia have made sound progress in the year, setting good foundations for growth in the years to come.
“In Europe, good growth in the group’s beauty division has helped to partially offset the more challenging trading conditions faced in the UK washing and bathing division.
“Furthermore, for all markets, we remain focused on innovation but with a sharpened lens on fewer, bigger, higher-margin product launches which will differentiate further our brands, as well as a reduction in overheads through optimising our operating model.
“The group’s balance sheet remains strong and we will continue to evaluate growth opportunities utilising the group’s brand portfolio and distribution capability. Whilst we expect another challenging year ahead, the business is well placed to return to growth and consequently the board has maintained the fullyear dividend.”