LONDON -- PZ Cussons (PZC -0.20%), the manufacturer of personal health care products and consumer goods, released a trading update this morning, for the half-year to Nov. 30, 2012.
The group's performance in Europe was reported as having been generally robust, especially in the U.K. washing and bathing division, where the core brands of Imperial Leather, Carex and Original Source showed increased profitability over the same period last year. Predictably, though, revenue and profitability in Greece were lower, owing to the dire condition of the Greek economy.
Although the Australian market remains "challenging," the company says that it has successfully implemented measures to improve the performance of the business, and that the Australian business returned to profitability during the period. Even better news came from Indonesia, where continued positive momentum is reported as delivering another period of revenue and profit growth.
However, the performance in Africa -- which accounts for about 40% of the company's revenue -- suffered as a result of problems in Nigeria, where violent social unrest, widespread flooding and the removal of an $8 billion fuel subsidy all served to reduce revenue. Performance in the smaller territories of Ghana and Kenya, however, was reported as being in line with expectations.
Looking ahead, the update stated the group's focus remains on new product development and further margin improvement. In addition, PZ expects trends in raw material costs to be more favorable in the coming year, and that it will begin to see benefits from its supply chain optimisation project. Overall, the board says it remains "confident of a return to profitable growth" during the current financial year.
But at 360 pence, PZ's shares trade at more than 21 times near-term earnings and even though the firm has lifted its dividend for a remarkable 39 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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