UK soapmaker profits from launch of new brands

Imperial Leather and Carex soapmaker PZ Cussons today said the launch of new soap brands in the UK helped boost sales in the first six months of the year.

The Stockport-based group said the introduction of limited edition Imperial Leather products along with the revamp of its Original Source brand led to a strong UK performance in the six months to November 30.

The group posted pre-tax profits of £30.2m (€45.7m), a rise of 4.5% over last year, on revenues of £279.8m (€423.7m), and said its outlook remained positive for the remainder of the year.

The upbeat statement came despite the impact of the continued weak dollar, which impacts the company because of its sizeable overseas operations.

PZ added that it had begun the construction of its new £15m (€22.7m) shower gels and liquids factory in Manchester, which is due to be completed at the end of 2008, while the sale of its Nottingham site was set for the same time.

Outside the UK, the group said it benefited from strong growth in its African markets, particularly Nigeria, where it had seen strong sales of health and beauty products such as Venus hair relaxer and Super Robb mentholated rub.

Sales of white goods, such as fridges and air conditioners, in partnership with China’s Haier, also helped boost the company’s success in the region.

PZ Cussons said profitability from its Nigerian businesses was further supported by the stable currency against the dollar amid a period of continued political and economic stability ahead of the country’s elections later in the year.

The group announced that it is in the process of establishing a second factory in the country for the manufacture of nutritional products, while the extension to its existing milk factory was due to complete at the end of 2007.

Chairman Anthony Green said: “The positive signs experienced in the first half should continue for the remainder of the year despite the impact of the continued weak dollar.

“The group’s focus remains on growth and margin improvement in selected geographical markets, particularly Nigeria, where the stable economic and political environment ahead of the forthcoming elections provides significant growth opportunities.”

The group added that its performance in Asia was ahead of last year, while profitability in its Australian markets had been impacted by lower selling prices and increased promotions amid increased competition, particularly in its branded detergent products.

PZ Cussons started life when George Paterson and George Zochonis – PZ – set up a trading post in Sierra Leone in 1879 to export cotton, palm oil and coffee and by 1886 they had opened an office in Manchester.

PZ bought a soap factory in Nigeria in 1948 and acquired soap maker Cussons Group in 1975. The firm now employs 11,000 people at operations in Africa, Australia, India and Thailand.

Shares in the group slipped 7p to 167p , or 4%, by mid-morning.