SSL raises dividend after profits surge

Related Quotes

Symbol	Price	Change
SSL.L	781.50	+6.50

{"s" : "SSL.L","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Foot deodorant and sexual lubricants have proved a profitable mix for SSL International (LSE: SSL.L - news) as the owner of the Durex and Dr Scholl brands raised its dividend and reported higher sales thanks to strong growth in Germany and eastern Europe.

Durex, which contributes just over 40 per cent of group turnover, was the fastest growing division in the company, with sales growth of 5.3 per cent. The group saw a particularly strong performance in Germany, Poland, Hungary and China.

"We put in a new sales force in Germany just about a year ago so we're getting the benefit from that," said Garry Watts, chief executive of Durex.

"We're also using the existing resources to get more distribution to increasing numbers of pharmacists in emerging markets."

Sales of the Durex Play range of sex toys and lubricants grew 10.5 per cent to £25.2m, helped by the launch of Play "O", a new clitoral stimulation gel, which has done particularly well in Spain.

"Durex Play is a new product category for consumers," said Mr Watts.

"Sales of Durex Play three years ago were zero so it's a brand new Durex business, and Play O is an extraordinarily good product.

"We are helped in Spain in that the advertising restrictions there are such that you can still talk about orgasm in the mainstream media whereas that's pretty difficult to do in the UK unless its three in the morning."

In the six months to the end of September, pre-tax profit jumped 60 per cent to £52m on revenues that rose 21 per cent to £391m, boosted by four months of contributions from BBLV, the Russian condom maker that SSL acquired in the spring.

Excluding acquisitions, revenues rose 7 per cent to £346m and operating profit gained 19 per cent to £47m.

Earnings per share rose 31 per cent from 11.6p to 15.2p and SSL raised its interim dividend by 19 per cent from 2.6p to 3.1p. SSL shares, which have risen 75 per cent in the last 12 months, rose another 4 per cent or 25.5p on Tuesday to 697½p.

The Dr Scholl brand of footcare products - comprising 28 per cent of SSL's revenues - continues to be hit by destocking in Italian pharmacies, where stockpiles have been squeezed by retailers trying to trim working capital.

The footcare products have seen growth of only 1.9 per cent, although growth in the sector has remained buoyant in Japan, France and Scandinavia, aided by the introduction of the Deo-Activ Fresh range of foot deodorant.