PZ Cussons returns to profit, despite continuing foreign exchange woes
Manchester-based soap manufacturing group, PZ Cussons, has returned to profit in its half year to November 30, 2024, despite a 10% fall in revenues.
The international consumer products group, which includes the Carex brand in its range, achieved turnover of £269.3m, down from £277.1m, on a statutory basis, but turned a £94.2m pre-tax loss last year into a £6.4m pre-tax profit for the latest six month period.
The group said the lower revenues were due to a 55% depreciation in the Nigerian Naira, versus Sterling, compared with the prior period.
The interim dividend remains unchanged at 1.50p per share.
CEO, Jonathan Myers, said: “Trading has been in line with expectations during the first half of our financial year and, together, three of our priority markets – the UK, Indonesia and ANZ – have delivered solid overall like for like revenue growth of two per cent.
“New product innovation, competitive brand activation and increased retail distribution have combined to deliver the strongest performance in our UK business for three years, thanks in part to particularly successful Christmas sales for Sanctuary Spa gifting.
“Indonesia recorded a third consecutive quarter of growth and in ANZ our brands have continued to grow share, albeit against a backdrop of market softness.”
He added: “Our H1 reported revenue and adjusted operating profit have continued to be impacted by the depreciation of the Naira. The more recent stabilisation of the exchange rate and our operational interventions on the ground have, however, enabled us to sustain our trading momentum in the Nigerian market whilst reducing our exposure to further currency depreciation.
“We are progressing with our plans to transform our portfolio to unlock value and reduce complexity, through the processes involving our Africa business and the St. Tropez brand.
“The trends of the first half of the year have continued into the second half, meaning we are on track to meet FY25 profit expectations.
“We remain confident in the long term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.”
The group said performance to the end of January has been in line with expectations and it expects group like for like revenue growth trends to continue in the balance of the year.
In September 2024 the group provided FY25 guidance for adjusted operating profit of £47-53m. This included an estimate, based on prevailing foreign exchange rates, of approximately £5m of costs related to foreign exchange losses on intercompany loans.
These costs, which relate to the Nigerian business and are non-cash, are now treated as an adjusting item. As a result, the adjusted operating profit guidance for the year has been revised upwards, by £5m, to £52-58m.
PZ Cussons said it continues to be confident in its long term potential as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.
