PZ Cussons "In Line With Expectations"


LONDON -- PZ Cussons shares are up more than 2% as of 8:30 a.m. EDT after the company released an interim management statement confirming that its performance and cash generation are in line with expectations.

A leading consumer-products group in Europe, Asia, and Africa, PZ Cussons stated its belief that results for the full year would deliver a return to profitable growth, despite challenging trading conditions in most of its markets as "consumer disposable income remains under pressure."

Europe saw its U.K. washing and bathing division perform well, especially the core brands Imperial Leather, Carex, and Original Source, despite the "intense promotional activity" in the trade, while its beauty division saw growth in international markets offset a tougher trading environment in the U.K.

In Asia, trading conditions in Australia remain challenging, although management commented that the business has now moved firmly back into profitability, while a weaker rupiah and high wage-inflation have limited the growth of profitability in Indonesia, denting the potential profits from continued positive momentum in the market.

PZ Cussons has seen its African operations hit by unrest in the north of Nigeria, although "the trading environment in the rest of the country has been more robust with no further fuel duty related impact taking place during the period." Production has begun at a new palm-oil refinery, and the new consumer food ingredients brand is due to be launched in June.

Having risen strongly in recent months, PZ's shares now trade at more than 25 times trailing earnings per share, and even though the firm looks set to lift its dividend for a remarkable 40 consecutive years, the shares currently yield less than 2%. So, despite its track record, PZ Cussons' immediate rating may not look that attractive.

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