The maker of Imperial Leather reported in its annual results that pre-tax profit has decreased 32% to £84 million (€119m) and sales fell nearly 5% to £819million.
Overall like-for-like sales did grow 2.3% thanks to demand for the St Tropez and Sanctuary brands in the UK, particularly with the launch of a new St Tropez shower gel tanning product which has been popular and the company now expects sales of 1m bottles; above the original forecast of 30,000.
“Performance since the year-end has been in line with expectations,” says company chairman Richard Harvey.
“Whilst the outlook remains challenging, the Group’s focus on its values, robust long-term strategy, our innovative product pipeline, and the strategic steps we have taken, provide a strong and exciting platform for future sustainable growth.”
Challenges
Whilst in the UK the Washing and Bathing division is performing well driven by its innovation pipeline and thanks to the good performance in Beauty division by the aforementioned brands above, sales have been down in the market in Asia, and Africa has proved even more challenging.
Around 40% of the group’s sales come from Africa and Nigeria is its biggest market on the continent; but it is in this region that the company has seen the most instability due to the ebola outbreak, terrorist threats, presidential elections and a significant currency devaluation hitting the country’s economy.
PZ Cusson management stresses, however, that having been in the market for a very long time it expects growth will return to previous levels, particularly in NIgeria despite tough trading conditions during the year.
“Despite tough trading conditions, particularly in our largest market Nigeria, underlying revenue and operating profit grew 2.3% and 2.7% respectively, and our market share positions were either held or grown in our core categories,” says Harvey.