SSL International first-half profits rise 59%

Nov 25 2009 by Iain Laing, The Journal

DUREX-to-Scholl footcare firm SSL International yesterday said first-half profits had jumped 59% as its key brands weathered tough trading conditions.

The company, which employs around 250 staff at its pharmacy plant in Peterlee, County Durham, was helped by a weaker pound and overseas acquisitions as it posted pre-tax profits of £51.9m for the six months to September 30.

Stripping out currency effects, sales of its branded goods grew 3.3% to £321m as demand for Durex and its Play range of lubricants and sex toys showed little sign of flagging. Durex condom sales were up more than 4% after a “robust“ performance across the range, with particularly strong markets in China, the Middle East and Eastern Europe.

Scholl footcare sales were up 1.9% despite the difficult consumer environment, helped by launches such as the Deo-Activ range of foot deodorants and an improved Cracked Heel Repair Cream.

Shares in SSL gained more than 4% yesterday – making it one of the strongest risers in the FTSE 250 – as the firm said it was “well on target” to hit its goal of boosting earnings per share by 50% in the three years to 2012.

“In the current trading environment we are continuing to invest in our brands to ensure that they are well positioned to benefit from any improvement in consumer confidence and expenditure,” it said.

Four months of trading from its recent Russian acquisition, BLBV also contributed £10.5m in operating profits on £45m in turnover, largely through sales of Durex as well as Evitest pregnancy testing kits.

Cazenove analyst Sally Taylor said SSL had produced “a strong set of interim results with earnings significantly ahead of expectations“ and upgraded forecasts for the full year by 5%.

The group was formed through a series of mergers 10 years ago but can trace its history back more than 100 years to when footcare products were first sold under the Scholl brand.

It now sells products in more than 100 countries worldwide and has distribution centres in Middleton, near Manchester, and Redruth in Cornwall

The company has said that the growing desire for sex toys and lubricants has been a key factor in its rising sales. Last year sales of its Durex Play range jumped by 17.7% in a year to £43.3m.

The company, which also owns the Scholl footcare brand, said the range has seen “particularly good growth“ in the UK.

At the end of last year pre-tax profits rose by a third to £76.5m in the year to March 31 from £57.4m a year earlier, the firm said.

SSL said full-year group sales rose 20.3% to £642.4m, with overall sales at Durex up 7.3% to £266.9m. Sales of its Scholl footcare products climbed 11.4% to £143m while Scholl footwear saw income rise 5.1% to £92.9m.