PZ Cussons takes confidence from product pipeline

First quarter trading at PZ Cussons was "robust" and the washing, bathing and beauty group was bullish that its bulging pipeline of new products will allow it to weather challenging trading conditions it is facing in most markets.

Despite the considerable uncertainty in its key African market of Nigeria, the FTSE 250 group said overall its performance and cash generation "in line with expectations", with its financial position having remained "strong".

Europe, which contributed more than 60% of group operating profits last year, was "robust" with washing and bathing brands such as Imperial Leather, Original Source and Carex in the UK offsetting weaker beauty where UK sales of St Tropez fake tan were hit by poor weather, though encouragingly the US is reported to have been "particularly strong’".

Africa, 21% of group earnings before interest and tax, saw "some improvement in liquidity" in Nigeria following the introduction of the new flexible exchange rate regime in June.

Performance was again "robust" with the diverse brand portfolio in Nigeria "working well in an environment where the consumer is under significant inflationary pressure", while smaller operations in Ghana and Kenya in line with expectations.

Asia saw "tough" conditions in Australia but with hopes buoyed by a strong new product pipeline in place for the remainder of the year across all categories, while Asian results are benefiting from weaker sterling.

Sales in Indonesia was reported as "strong", while Thailand and the Middle East were in line.

On the outlook, management stated: "The strength of the Group's brand portfolio and new product pipeline is serving us well and, together with a continued focus on costs, leaves the Group well placed to manage the challenging trading conditions that exist in most markets.

"The group's balance sheet remains strong and well placed to pursue new opportunities as they arise."