Carex maker reports drop in profit due to spiked raw material, freight cost

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Carex marked the further easing of lockdown with nationwide experiential and outdoor campaign on May 17, 2021 in London, England. (Photo by Jeff Spicer/Getty Images for Carex)

Imperial Leather and Carex maker PZ Cussons has reported a drop in annual profits, saying cost inflation and the impact of consumer cutbacks have impacted its performance. 

The business posted pre-tax profits of £66.6 million for the year to May 31, a 2.9 percent drop from £68.6 million a year ago. However, profits were ahead of market expectations, the group said. 

It also saw its revenues ease back from £603 million to £593 million over the year. 

The group also added that spiked raw material prices and freight costs led to around 11 percent increase in the cost of sales compared to the prior year – or £40 million more. 

However, the group said it was able to offset price rises by pushing through price changes and cost initiatives throughout the year. 

Rising prices also impacted household spending. The company said it is working hard to avoid passing higher costs of logistics and supply chains on to consumers. 

“PZ Cussons has delivered a resilient performance over the past year, against the backdrop of challenging conditions in our markets,” Evening Standard quoted Chief executive Jonathan Myers as saying. 

“We have achieved this through our strategy to invest in our brands, focusing on the core categories. 

“While there is plenty more to do and the external environment remains challenging, we have made a good start to the current financial year and continue to see significant long-term opportunities ahead as we build towards a higher growth, higher margin, simpler and more sustainable business.”