Owner of Imperial Leather and Carex brands, PZ Cussons, has reported robust headline interim figures as overseas demand and higher prices countered weakness in the UK.
According to media reports, the group revenues rose 18.8 per cent to £336.9 million during the six months ended 3 December 2022 majorly due to recent acquisition of the Childs Farm business, favourable foreign exchange rates, and extra reporting days in the period.
On a like-for-like basis, revenues climbed 6.1 per cent, although this was driven by price rises to counter cost increases, with sales volumes sliding 5.4 per cent.
PZ Cussons noted that like-for-like revenues of its ‘Must Win Brands’ – which include Carez, St Tropez, Sanctuary Spa, Premier, Joy, Cussons Baby, Morning Fresh and Original Source – increased 2.2 per cent.
The company’s underlying pre-tax profits rose 7.8 per cent to £40.5m as strong growth in its Asia Pacific and Africa units offset a slump in its division covering Europe (incl. UK) and the Americas. Operating margins slipped from 11.6 per cent to 9.9 per cent, although PZ Cussons stated this was down to the geographic mix of its sales with ‘revenue growth management’ largely offsetting inflation and recovery forecast for the remainder of the year.
Adjusted operating profit in Europe and the Americas slid 51.5 per cent to £9.5m as the business faced soaring costs and weak consumer confidence. The unit’s revenue declined 6.0 per cent on a like-for-like basis, with PZ Cussons blaming post-Covid normalisation of its Carex brand, a strong comparable period for its Beauty brands, and an 8.3 per cent decline in the UK washing and bathing category in the period.
Chief Executive Jonathan Myers noted that the results came against a tough trading backdrop.
“Our performance in the first half of the year has continued to be impacted by a challenging macro environment, with ongoing high cost inflation and reduced consumer confidence,” he said.
“We have nevertheless delivered a robust financial performance with continued like-for-like revenue growth, and our expectations for the full year are unchanged.”
The group is expecting trading to improve over the second half of its financial year as cost pressures ease across Europe and the Americas division, helped also by recent action to increase prices.
“We expect margins to improve significantly in the second half due to improved trends in Carex and St Tropez, the full period effect of price increases implemented during the first half and more favourable cost phasing,” the company said.
“Overall, while there remains more to do in our transformation and near-term headwinds to navigate in some of our markets, we are confident about the opportunities ahead of us.
“We are working to build a higher growth, higher margin, simpler and more sustainable business,” Myers added.
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