Cussons half-year revenue slips 4.3% to £293m

Manchester-based soaps and consumer products company PZ Cussons said on Tuesday “challenging market conditions across key geographies” led to a 4.3% decline in adjusted group revenue to £293.3 million in the six months ended November 30, 2019.

Cussons said adjusted operating profit fell 13% to £30.3 million “resulting from losses in Nigeria and lower profits in the UK and Australia offset by growth in Indonesia.”

Adjusted profit before tax fell 13.1% to £28 million.

Cussons said its reported profit before tax grew 34.5% to £34.7 million “driven by exceptional profit on disposal of our business in Greece and lower exceptional charges than in the prior period.”

Cussons announced on December 12 that CEO Alex Kanellis will retire on January 31, 2020, after 26 years with the group. It said on Tuesday plans to appoint his successor are “well advanced.”

In its outlook, Cussons said: “A stronger second half profit before tax is expected subject to no further worsening of the economic and trading environments across our key geographies.”

Cussons’ shares edged more than 1% higher to 197p give the firm a current stock market value of around £834 million.

The firm said its key areas of improvement are expected to include a return to stability in the UK “primarily due to recovery in hand wash driven by environmentally friendly range and marketing plans at trade level” and increased revenue in its US Beauty business “supported by significant marketing investment.”

Cussons said it also expects a return to more stable results in Australia “driven by marketing plans in Home Care and Food & Nutrition categories” and stability in Africa “largely driven by marketing investment in our Focus Brands and restructuring benefits.”

The company concluded: “Assuming these initiatives are successful, full year revenue and profit before tax from continuing operations is expected to be modestly below prior year.”

Cussons chair Caroline Silver said: “The group’s adjusted results for the first half of the year were impacted by challenging market conditions across our key geographies.

“We were pleased to see that the performance of our Focus Brands was stable overall compared to prior year.

“Our investment remains targeted towards these Focus Brands and this will continue in the second half of the year.

“We have started to restructure our portfolio of activities, disposing of our business in Greece and agreeing the sale of our Polish brand.

“Further portfolio reshaping is underway and initiatives to improve our operating efficiency are being implemented at pace.”