PZ Cuzzons has managed to increase profits in crisis-hit Greece where it owns popular olive oil brand Minerva, which is a staple food there.
The Manchester-based company — controlled by the Zochonis family, who are originally from Greece — reported annual results on Tuesday, in which operating profits in Europe rose, helping to offset an earnings slide in Africa and Asia.
The group’s performance in Greece, which accounts for 6 per cent of sales, was also boosted by its £5.4m acquisition of the Top vinegar brand.
Brandon Leigh, finance director, said the sale of its low-margin Polish homecare business last year and a focus on higher-margin types of food and beauty – such as the St Tropez tanning range – was “working well in Europe”.
Analysts at Canaccord Genuity said the European operating profit margin of 22 per cent was “attractive and demonstrates the management’s ability to compete effectively with larger peers”.
But conditions were tough in Africa, its single biggest market with 40 per cent of sales.
Its largest market is Nigeria, where it has been affected by civil unrest, a weakening currency and the consequences of the regional outbreak of Ebola.
The company said it expected more challenges from weaker currencies in Nigeria, Australia and Indonesia, as it reported a 41 per cent fall in annual net income. Weaker currencies had cut revenues at the consumer goods group, whose brands include Imperial Leather soap, by £48.3m and operating profits by £4m.
“In Nigeria, a recent tightening in foreign currency restrictions is also putting additional pressure on the exchange rate,” the company said. The Nigerian central bank said last month that it would bar importers from using foreign currency to pay for items ranging from chickens to wheelbarrows.
Annual sales for the group, whose brands include Carex handwash, fell 5 per cent to £819m. Underlying pre-tax profits, adjusted for almost £25m of one-off items, fell 5.4 per cent to £108.8m.
Pre-tax profits for the 12 months to the end of May fell almost one-third to £84m, while net income fell from £98.7m to £57.9m.
Asia reported the biggest fall in regional profits, dragged down by Australia where PZ Cussons’ homecare brands are being squeezed by private labels.
The dividend rose 3.1 per cent, the 42nd consecutive annual increase.
