PZ Cussons predicts better-than-expected profits as Covid-driven cleanliness endures
Hygiene, baby and beauty brands returned the business to revenue growth, but consumers have calmed down on handwashing since the beginning of the pandemic.
Consumer products giant PZ Cussons reported steady revenue growth of 7 per cent across all regions and its hygiene, baby and beauty brands in the financial year to May 31, in a trading update this morning
The group’s “Must Win” brands – which include Carex, St. Tropez, Sanctuary Spa, Morning Fresh and Original Source – saw revenue growth of 11 per cent year-on-year, as people began to socialise but still prioritised cleanliness as Covid-19 lingered. The same brands also drove revenue in the fourth quarter of the year, up 7 per cent over the two years since FY19.
PZ Cussons said it expects profit to be ahead of its consensus of £63-64m profit before tax, and ahead of the previous year – when profits fell 14 per cent.
The Manchester-based group previously reported unprecedented demand for its hygiene brands at the beginning of Covid-19, as consumers rushed to wash the germs away.
This trend has slightly tapered over a year into the pandemic and is currently holding back year-on-year comparisons, the group said today. As a result, its revenue in the fourth quarter declined compared with the same period last year.
Chief executive officer Jonathan Myers said the company’s work had “only just begun”, as it battled commodity and cost headwinds following the pandemic, and planned to mitigate these by raising product prices.
“Despite the obvious volatility and challenges, we returned the business to revenue growth, delivered positive price / mix to improve gross margin and put our focus and investment back into building brands,” Myers said.
“In the longer term we are working to sustain the early impetus of the turnaround over the coming years,” he added.