Currency headwinds limit first-half growth at PZ Cussons

21st Jan 2014 08:10

- Profits up 6.2 per cent, sales up 4.1 per cent- Weakening currencies in Asia weigh on growth- Analysts at Panmure Gordon cut forecastsConsumer products group PZ Cussons managed to hit market forecasts in the first half despite currency headwinds limiting growth in revenues and profits.The company, knowns for brands such as Imperial Leather, Carex and Original Source, said that pre-tax profit increased by 6.2% to £43.1m in the six months to November 30th 2013. Earnings per share (EPS) were 3.7% higher at 6.66p.This included exceptional costs totalling £4.5m due to charges for restructuring the supply chain, the integration of the Rafferty's Garden baby food acquisition and other restructuring costs. Excluding these, profits would have been 7.9% higher than last year.Sales were up 4.1% at £431.8m with growth achieved across its key geographies of Africa, Asia and Europe.However, it was estimated that weakening currencies in Asia had a two percentage point impact on both the top and bottom line.The interim dividend was raised by 7.7% to 2.53p a share.Chairman Richard Harvey labelled it a "good result": "This has been achieved despite a significant weakening in Asian currencies, and in particular the Australian dollar and Indonesian rupiah," he said.He said that the firm's performance in the third quarter has been in line with expectations, though most markets remain "challenging", in particular in Asia due to ongoing currency weakness.As a result, analysts at Panmure Gordon trimmed their full-year EPS estimates for the firm by 2% despite the in-line first half, saying: "currency headwinds have continued to build and we now expect H2 on H2 currencies to be a 7% drag."Nevertheless, the 8.1% EPS growth now anticipated to 17.98p is still "much better than the UK consumer staples peers". The broker kept a 'buy' rating for the stock.The stock was down 1.72% at 389.4p in early trading on Tuesday.BC