Faster factories lift PZ Cussons

Most of the hit came in its African business, which suffered as the Nigerian Naira weakened by 16 per cent against the US dollar. The group's electricals joint venture, HPZ, also suffered as tightening controls in the Nigerian banking industry led to a "liquidity squeeze", which held back consumer spending in the second quarter. Revenues in the region fell 11 per cent to £141m, although the benefits of a huge investment in high-speed production lines and more efficient distribution helped operating profits climb 4 per cent to £13.8m.

The UK operations also had a helping hand from its new plant at Agecroft, as well as a shift in the product mix towards higher-margin ranges, such as hand hygiene gel Carex and luxury toiletries brand, Sanctuary. "It's been about new product launches and getting the right products at the right price in store and keeping the consumer interested," said Mr Leigh, adding that the new UK facility also included integrated product development labs enabling it to maintain the pace of innovation and fend of the challenge from supermarket own-label products.

Meanwhile, strong cash generation raised the prospect that PZ Cussons could be on the lookout for further acquisitions, after the successful takeover of Sanctuary in January 2008. "We don't have to acquire and we're being quite selective, but if we did it would be bolt-ons in personal and home care, as well as food in emerging markets," said Mr Leigh.

Broker Panmure Gordon expects underlying full year pre-tax profits of £101m and EPS of 14.6p (from £88.8m and 12.4p in 2009). Investors should also note that the large jump in the reported dividend was the result of the company rebalancing its half-year to full-year payout ratio. Panmure forecasts a more modest 11 per cent increase in full year dividend to 5.85p.

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