Interim Results for the Half Year to 30 November 2021

PZ Cussons today announced its Interim results for the Half Year to 30 November 2021. Despite significant cost inflation, the company delivered a return to like-for-like revenue growth in Q2 and maintained its margins during the period.

In the first half, while revenue from continuing operations was down 2.0% on a like-for-like basis,  revenue was up 13% when compared to the equivalent period two years ago.

Revenue in PZ Cussons’ core categories of Beauty and Baby were up by 21% and 1% respectively, and although hygiene revenue was down 12%, excluding Carex it was up 6%.

Revenue from Must Win Brands, excluding Carex, grew by 10% and the overall business showed strong underlying momentum when comparing the results to the equivalent period two years ago. The Must Win Brands of Morning Fresh, Premier, Joy and Cussons Baby all grew revenue by double-digits versus the prior period.

The Board is recommending an interim dividend, maintained in line with the prior year, of 2.67p. This reflects its confidence in the underlying business momentum but also recognises that PZ Cussons, like other consumer goods companies, continues to navigate uncertainty in the still volatile inflationary environment.

Despite this challenging environment, with cost pressures accelerating, PZ Cussons expects to deliver adjusted profit before tax from continuing operations for the full year within the current range of consensus estimates.

Jonathan Myers, Chief Executive Officer, said:

“We have seen continued progress against both our new strategy and our pursuit of sustainable, profitable revenue growth. The Q1 revenue decline was driven primarily by Carex lapping unprecedented demand for Hygiene products at the peak of the COVID-19 pandemic in the prior year. The business returned to revenue growth in Q2 with our core Baby and Beauty categories growing revenue in the first half overall. Revenue from Must Win Brands, excluding Carex, grew +10% and the overall business showed strong underlying momentum when comparing the results to the equivalent period two years ago. Continued Price / Mix improvements helped strengthen gross margin in the first half of the year, allowing us to increase Media & Consumer investment behind our brands and maintain our operating margin. These results demonstrate our ability to use the strength of our brands to protect margins in the face of cost headwinds.

Beyond our financial performance, we made continued progress against our strategy: Building brands for life. Today and for future generations. We have introduced new talent as we continue to strengthen our Executive Leadership Team and rolled out a new set of values to underpin our drive to build a stronger performance culture. At the same time we remain on track to simplify our Nigeria operations, realising value through the sale of some of our residential properties, and we are strengthening our sustainability plans on our path to B-Corp certification. The disposals of our Food & Nutrition businesses, the Nutricima milk business in Nigeria in FY21 and the five:am yoghurt business in Australia in FY22 demonstrate our determination to optimise our portfolio, explaining the temporary complexity in our alternative performance measures.

The Board has approved an interim dividend, maintained in line with the prior year, of 2.67p, reflecting our confidence in the underlying business momentum but also recognising that challenges remain for the second half. Commodity and freight costs show no sign of abating in the near term and we continue to anticipate cost pressures into FY23. Our focus is on both protecting our margins but also continuing to invest in the business, to secure future growth and build the capabilities we need to deliver against our strategy.”