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Godrej Consumer Products Ltd, a focused FMCG player and one of the fastest growing companies in the sector with a presence in the Soap and Personal Care segments, today announced its unaudited financial results for the first quarter ended 30 June 2006.  

Commenting on the results, Mr. Adi Godrej, Chairman and Managing Director, GCPL, said, "I am pleased to report continuing growth on the back of healthy operating performance. Our profitability continues to be strong despite a significant increase in investments in advertising and promotional activity. We have taken one more step towards establishing our presence in the global market with the acquisition of Rapidol South Africa. Domestically our expanded soap, hair colour and toiletry facilities which will be operational in FY07, will enable us cater to the healthy demand growth we are witnessing.  I remain confident of GCPL's ability to maintain its strong growth momentum. "

  

Financial overview 

Q1 FY 2006-07 (April 2006 - June 2006) v/s Q1 FY 2005-06 (April 2005 -

June 2005)

.         Sales revenue (net of excise) increased by 42% to Rs. 237.6 crore from Rs. 167.7 crore

• GCPL Brand sales  higher by 19% to Rs. 188.0 crore from Rs. 157.5 crore
• Profit Before Interest Depreciation and Tax (PBIDT) up 28% at Rs. 42.9 crore compared with Rs. 33.4 crore      
• PBIDT margins lower at 18.0%. from 19.9%. This decline is primarily attributable to:

-          Higher advertisement and publicity (A&P) spend to support new product and variant launches as well as towards newly acquired Keyline Brands' products. Spend on A&P increased  by 102% compared to the corresponding quarter last year . This includes spends of Keyline Brands Ltd .

 

·                     Profit Before Tax (PBT) higher by 28% at Rs 38.1 crore as compared to Rs 29.8 crore despite higher interest payments on account of borrowings made towards funding of the acquisition of Keyline Brands (U.K.)

• Net Profit  increases 26% from Rs. 27.1 crore to Rs.34.1 crore
• PAT margins reduce from 16.2% to 13.8% mainly due to

-          Increase in MAT rates from 7.5% to 10%

-          Keyline Consolidation .

 

• EVA for the period up 17% at Rs. 28.8 crore
• EPS improves to Rs. 6.05 from Rs. 4.79 (both figures not annualized)

 

Note: The Q1 FY2006-07 financial results include the performance and the cost of acquisition of Keyline Brands (U.K.) which Godrej Consumer Products acquired in the preceding financial year

Business and operational perspective       

·         Vegetable oil prices were higher as compared with the corresponding quarter last year. Prices over the last two months have however remained stable

Segmental overview

Soap

 

·         Sale of Godrej Brand Toilet Soaps grew 21% in value terms during the quarter under review.

·         PBIT margins of the Soap segment declined to 12.8% in Q1 FY2006-07 compared to 13.3% in the  corresponding period last year, primarily due to increased A&P spend

·         GCPL maintained its position as the second largest toilet soaps player at a market share of 9.5% for the quarter

·         The Company is in the process of expanding its noodling and fatty acid capacity in Malanpur and setting up a new factory in Katha in Himachal Pradesh

·         No1 Lavender well accepted by consumers.

 

Personal Care

·         Sales improve 15% over corresponding quarter under review 

Hair Colorants 

·         GCPL's  hair colorant business grew 10% over the previous quarter in value terms

·         The cream based hair colorant  Renew which was relaunched with enhanced packaging and communication, has been well received by consumers

·         During the quarter the Company launched Renew Highlights which is available across 2 colours. The introduction has been well accepted at both the distributor as well as the consumer level

·         The Company is constantly exploring opportunities to introduce new colours and innovative products in this category

 

Toiletries

·         Toiletries sales increased by  41% during the quarter with growth being witnessed across  all  categories namely Talcum Powder, Shaving cream and Diapers

·         Both variants of the Godrej No. 1 talc as well as Cinthol talc performed well during the quarter.

·         Godrej Shaving Cream and Snuggy  continue to enjoy encouraging growth

 

Liquid detergents

·         During the quarter, GCPL introduced a new product 'Glossy' which is an all-new Premium DishWash Liquid. It is specially formulated for gentle yet effective cleansing of special utensils and specializes in cleaning glassware, non-stick ware and crockery. It gives shine to the utensils and thereby increases their appeal on kitchen shelves.

GCPL is in the process of setting up a hair colour and toiletries facility in Sikkim that is expected to commence operations in the current financial year

Keyline operations

·                     Major brands viz Cuticura & Inecto have reported healthy growth

·                     Sales for the quarter Rs 46.0 crore

·                     PAT for the quarter Rs 3.7 crore and EVA Rs 1.1 crore after accounting for  finance cost of  acquisition  

The Rapidol Acquisition

·         In July'06  GCPL entered into an agreement to acquire the South African hair color business of Rapidol, U.K. as well as its subsidiary Rapidol International which had a combined turnover of 52 million South African Rand (Approx Rs 33 crore) in 2005. The acquisition is expected to be completed in Q2

·         The acquisition gives GCPL ownership of strong ethnic hair colour brands like 'INECTO' and 'SOFLENE' along with a presence in the large South African hair care market. Apart from that GCPL  gets an opportunity to enter  into several other African nations

·         It also gives enables GCPL to access to the Modern Trade Network and ownership of customer listings enjoyed by INECTO and SOFLENE

Sourced From : Perfect Relations Limited