Cussons sales up 23%, but ‘adverse headwinds’ weigh

Manchester-based consumer products company PZ Cussons said on Wednesday its first-quarter revenue rose 23% due to a rise in demand for soaps and hand sanitisers during the COVID-19 pandemic.

But in a trading update for the first quarter ended August 31, 2020, Cussons also warned the pandemic could hamper sales in its beauty business.

Cussons shares fell about 4%.

In its outlook, Cussons said: “COVID-19 and its aftermath in terms of both economic factors and consumer confidence will clearly continue to have a significant impact on the consumption of our Personal Care, Home Care and Beauty products. 

“Despite the renewed momentum of our business in the first quarter we expect volatility and risk to continue as well as increased investment in our brands and capabilities as we prepare for a multi-year turnaround of the business, starting with a comprehensive review of our strategy.”

Cussons CEO Jonathan Myers said: “The first quarter results have given us a good start to the year with growth in all three regions and an improvement in profitability.

“The majority of our Focus Brands are now in growth, led by Carex in the UK.

“In the second quarter we plan to increase investment further in building our brands and capabilities.

“We are currently in a process to examine and evolve our strategy to deliver sustainable top line growth and improved operating margin.

“The operating landscape remains highly volatile with many of the economies we operate in moving into recession, the continuing uncertainty of the COVID-19 pandemic and categories remaining highly competitive with pressure on discounting and cost.

“While it remains very difficult to forecast and give guidance we expect some adverse headwinds for the rest of the year following this good start.”

Cussons also published results for the year ended May 31, 2020, showing adjusted profit before tax fell 14.5% to £62 million with revenue down 2.4% to £587.2 million.

Cussons is recommending a final dividend of 3.13p (2019: 5.61p) per share, making a total of 5.80p (2019: 8.28p) per share for the year.

“The decrease primarily reflects the need to reset our dividend coverage to a more sustainable level,” said Cussons chair Caroline Silver. 

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