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Cussons sees soap sales drive profits

BRITISH soap and shampoo maker PZ Cussons said yesterday it was poised to make new acquisitions after revealing a 21 per cent rise in its first-half profit.

The maker of Imperial Leather, Carex soap and Original Source products ended the six months to 30 November with a pre-tax profit of £44.7m – slightly above market expectations.

The company is planning a £39m investment programme in Nigeria later this year.

Cussons shares closed 1.2 per cent higher at 250p – valuing the business at around £1.7bn.

Revenue increased 0.7 per cent to £370m in the first half.

The Manchester-based company said sales of its Carex soap were particularly strong after government advice on using anti-bacterial soap to combat swine flu.

Finance director Brandon Leigh said: “We will be building up cash and therefore that will leave us well placed either to make brand or business acquisitions or to do other things organically.

“Our key markets are the UK, Australia, Indonesia and Nigeria. Any business or brand which is of quality and which would enhance what we have that we can’t do organically then we would look at. But we won’t spend for the sake of it.”

Prior to the update analysts were forecasting a consensus year to end-May 2010 with pre-tax profit of £100m, up from £88.8m in the previous year.

PZ Cussons’ other major brands include Original Source and the Sanctuary spa range.

Panmure Gordon analyst Graham Jones said: “The UK business is clearly benefiting from the supply chain investment of recent years, both in terms of innovation pipeline and efficiencies.”

Operating profits in Europe jumped to £25m from £20.8m.

In Africa the figure was up £500,000 at £13.8m while in Asia they jumped by £1.2m to £6.1m in the company’s gobal upturn.

The Nigerian market has been particularly strong for Cussons.