Interim Results for the Half Year to 3 December 2022
Continued profitable like for like revenue growth FY23 outlook reiterated despite the challenging macro environment
Jonathan Myers, Chief Executive Officer, said: “Despite the continued challenging macro environment, we have delivered another quarter of like for like revenue growth. Our first half performance has been in line with expectations and we are reiterating our full year outlook. This is thanks to work we have done to make PZ Cussons a more resilient business and our focus on building stronger brands. For example, in the UK, our new brand Cussons Creations is serving cost-conscious shoppers and the re-launched Sanctuary Spa is for consumers looking to treat themselves at home with an everyday indulgence. 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.”
|
Adjusted |
Statutory |
|||||
|
H1 FY23 |
H1 FY22 |
|
H1 FY23 |
H1 FY22 |
|
|
|
Revenue |
£336.9M |
£283.7M |
18.8% |
£336.9M |
£283.7M |
18.8% |
|
LFL revenue growth |
6.1% |
(2.0)% |
– |
|
||
|
Operating profit |
£33.2M |
£32.9M |
0.9% |
£39.2M |
£24.4M |
60.7% |
|
Operating margin |
9.9% |
11.6% |
(170)bps |
11.6% |
8.6% |
300bps |
|
Profit before tax |
£34.5M |
£32.0M |
7.8% |
£40.5M |
£23.5M |
72.3% |
|
Basic earnings per share |
5.16p |
5.64p |
(8.5)% |
5.90p |
4.23p |
35.9% |
|
Dividend per share |
|
2.67p |
2.67p |
0.0% |
||
Group Summary
· Like for like (‘LFL’) revenue growth of 6.1%, driven by price/mix improvements, with limited volume declines
· Must Win Brands (‘MWBs’) LFL revenue increased 2.2% (6.7% growth excluding Carex), with the large majority of the brands in good growth
· Reported revenue grew 18.8%, driven by the contribution of the Childs Farm acquisition, favourable FX and the impact of additional reporting days in the period
· Adjusted operating profit margin decline of 170bps in line with expectations, driven primarily by adverse geographic mix, with cost mitigation and Revenue Growth Management largely offsetting underlying inflation. On track for margin improvement in H2
· Adjusted EPS declined 8.5% as growth in adjusted profit before tax of 7.8% was more than offset by a higher tax charge and the increase in minority interests as a result of the improved profitability in Africa; on a statutory basis, EPS increased 39.5% to 5.90p
· Balance sheet remains strong with a new £325 million credit facility agreed, incorporating ESG-linked KPIs
· Interim dividend of 2.67p, unchanged from H1 FY22
· Continued strategic progress against ‘Building brands for life’ including:
o A doubling of investment in MWBs compared to H1 FY20, including recent marketing campaigns for Original Source, Sanctuary Spa and Portfolio Brand Imperial Leather’s first TV campaign in seven years
o Ongoing simplification of our Nigerian operations, with over £30 million of cumulative proceeds now achieved from the sale of residential properties and an improved ERP infrastructure
o Childs Farm continues to perform well with the ongoing integration into our own operations and new international listings recently secured
o Further growth in sustainability-led packaging, including 200% growth in Sanctuary Spa refill sales which also offer better value to the consumeR
o Incremental investment to prepare selected MWBs for entries into new markets and adjacencies
· FY23 outlook and long-term ambition is unchanged from that provided at the FY22 Results in September 2022