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McPherson's announces $11.7 million first half profit
[Thu 23/02/2012 11:16:16]
 Consumer products company McPherson’s Limited has announced an after-tax profit of $11.7 million for the six months to December 31 2011, down from $15.8 million for the same period the year before.
The figure is in line with guidance from the company’s annual general meeting in November 2011 and excludes one-off costs related to the demerger of the printing business.
Subdued retail sales due to low consumer confidence – which has been rocked by cost of living increases and global economic uncertainty – and challenging retail conditions – retailers requesting heavier discounting and focusing more on developing private labels – have impacted on sales in the first half of the financial year.
Other factors impacting McPherson’s financial results include the high Australian dollar, which has increased competitor activity and changes in discretionary spending.
‘In a difficult trading environment where consumer spending has deteriorated and retailer ranging strategies have been challenging, McPherson’s has been able to achieve significant increases in revenue from the hair care and beauty categories through growth in the Lady Jayne and Manicare brands,” says managing director Paul Maguire.
“This was more than offset by lower revenue from Impulse Merchandising and our Housewares brands. Sales of Multix household consumable products were also lower as a result of retailers reducing their inventory levels.
“To overcome these challenges, we are implementing a number of initiatives which we expect to benefit second half performance.
“Following shareholder approval of the demerger of the printing division in January 2012, McPherson’s is well positioned as a focused consumer products business to expand its operations both organically and through strategic acquisitions. Already, the acquisition of Cosmex last month has strengthened our position in the personal care market and we are reviewing other value-accretive opportunities which leverage our sourcing, marketing and logistics capabilities.
“We are also targeting a number of opportunities to increase automation and upgrade operational processes. These will improve customer service. In addition, they will increase productivity and efficiency, lower the cost of doing business and facilitate efficient integration of future acquisitions.”
McPherson’s expects to achieve similar earnings for the second half of the financial year to the previous corresponding period, but forecasts a 20 per cent decline in full year profit before tax in line with guidance.
“We will continue to focus on innovation and new product development to boost sales of our strong portfolio of well recognised brands, while rigorous expense control and efficiency improvements will reduce our operating costs. The combination of our brands and our strong balance sheet positions the company well for future growth,” Maguire adds.
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