Preliminary Results 2022
Second year of like for like revenue growth and a good start to FY23
Building a higher growth, higher margin, simpler and more sustainable business
Jonathan Myers, Chief Executive Officer, said: “PZ Cussons has delivered a resilient performance over the past year, against the backdrop of challenging conditions in our markets. We have achieved this through our strategy to invest in our brands, focusing on the core categories of Hygiene, Baby and Beauty, while significantly raising the bar on the way we operate. We are reporting a second year of strategic progress, with revenue and operating profit both higher than two years ago. We have made good progress in addressing the legacy issues in our business and are now moving from Turnaround to Transformation. 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.”
|
For the year ended 31 May |
Adjusted |
Statutory |
||||
|
2022 |
2021 |
% |
2022 |
2021 |
% |
|
|
Revenue |
592.8 |
603.3 |
(1.7)% |
592.8 |
603.3 |
(1.7)% |
|
LFL revenue growth |
2.9% |
7.1% |
n/a |
|
||
|
Operating profit |
67.9 |
71.0 |
(4.4)% |
66.6 |
73.9 |
(9.9)% |
|
Operating margin |
11.5% |
11.8% |
(30)bps |
11.2% |
12.2% |
(100)bps |
|
Profit before tax |
66.6 |
68.6 |
(2.9)% |
65.3 |
71.5 |
(8.7)% |
|
Basic earnings per share |
12.71p |
13.12p |
(3.1)% |
12.02p |
10.09p |
19.1% |
|
Dividend per share |
|
6.40p |
6.09p |
5.1% |
||
Group Summary
· Improvement in like for like (LFL) revenue momentum throughout FY22, with Q4 LFL growth of 7.1%, driven by strong price/mix growth and limited volume impact
· Reported revenue declined 1.7% as adverse FX movements and net disposals more than offset LFL growth
· Adjusted Profit before tax of £66.6 million, ahead of consensus expectations, with pricing and productivity initiatives largely offsetting cost inflation of c. £40 million (11% cost of sales growth)
· Proposed full year dividend of 6.40p per share, representing growth of 5.1% and reflecting the Board’s confidence in the strategy and long-term business prospects
· Balance sheet further strengthened, with adjusted net debt/adjusted EBITDA leverage reducing to 0.1x
· Continued strategic progress against ‘Building brands for life’ including:
o LFL revenue growth in seven of our eight existing[1] Must Win Brands (‘MWB’), due to better execution of, and improved returns on, Brand Investment. Carex grew market share by 2 percentage points
o Further portfolio simplification, with £25.8 million of proceeds from the disposal of non-core assets, including five:am and Nigerian residential properties
o Childs Farm, acquired in March 2022, is progressing well, with a number of operational improvements already made
o Launch of new sustainability goals and progress towards B Corp certification: Childs Farm became a B Corp in July 2022
o Strengthening of leadership team and commercial capabilities
· On a statutory basis, profit before tax declined by 8.7% due to the reduction in revenue and a brand impairment. EPS grew 19.1% due to a one-off tax charge in the prior period
Q1 FY23 Trading update and Outlook
· Q1 FY23: LFL revenue growth of 6.7% driven primarily by continued price/mix improvements
· FY23 outlook: Notwithstanding the significant challenges related to cost inflation and consumer spending, which will remain uncertain over the coming months, we expect to deliver FY23 results in line with current consensus estimates
· Long term ambition: LFL revenue growth of mid-single digits (compared to low-mid single digits previously) and adjusted operating profit margins in the mid-teens (compared to 11.5% in FY22)
· Investments of c. £20 million over FY22-25 to enable the continuing transformation of the business, expected to be accounted for as adjusting items