PZ Cussons released full year results on Thursday which highlighted the progress in their strategy of moving from ‘turnaround to transformation’ by disposing of non-core brands and focusing on core brands in Hygiene, Baby and Beauty.
Like-for-like sales rose 2.9% in the year to 31st May 2022 while the impact of disposals and foreign exchange saw group revenue fall 1.7% to £592.8m.
Group profit before tax also slipped marginally, but was still ahead of market consensus with a full year PBT of £66.6m.
Like many firms currently, PZ Cussons experienced margin compression due to rising costs, but cost saving initiatives offset much of the impact as operating margin fell 30 basis points to 11.5%.
PZ Cussons shares were little changed in early trade on Thursday.
“Declining margins and volumes remain a key challenge for PZ Cussons in 2022 due to rising wages, raw materials, and energy prices. The UK and Australia will likely experience significant profitability pressures. However, prices in Asia and Africa could stem margin decline at expense of volume,” said Alex Smith, Global Sector Lead for consumer industries research at at Third Bridge.
“Carex’s pandemic boom is now over due to the normalisation of demand, inflation, and more competition in the sector.”
“Our experts say that PZ Cussons probably owns too many brands. It should trim its portfolio by selling off underperforming brands and increase its breadth in 3-4 essential categories through acquisitions.”