Shares of Manchester consumer products company PZ Cussons plc rose as much as 8% after it published results for the six months to November 30, 2024, and revised upwards its adjusted operating profit guidance for the year by £5 million to £52-58 million.
Cussons said its reported first-half revenue decline of 10% to £249.3 million was “due to the 55% depreciation in the Nigerian Naira versus Sterling compared to the prior period.”
The firm said its like-for-like (LFL) revenue growth of 7.1% was “driven by pricing in Africa and growth in UK and Indonesia.”
Adjusted profit before tax declined 24.1% to £19.8 million “reflecting the 11.8% reduction in operating profit and increased net finance expense.” On a statutory basis, profit before tax was £6.4 million compared to a loss of £94.2 million in the prior year.
A dividend of 1.50p per share was declared, in line with last year’s payment.
Cussons employs over 2,600 people across its operations in Europe, North America, Asia-Pacific and Africa. Its brands include Carex, Childs Farm, Cussons Baby, Imperial Leather, Morning Fresh, Original Source, Premier, Sanctuary Spa and St. Tropez.
On current trading and FY25 outlook, Cussons said: “Performance to the end of January has been in line with our expectations and we expect Group LFL revenue growth trends to continue in the balance of the year.
“In September 2024 we provided FY25 guidance for adjusted operating profit of £47-53 million. This included an estimate, based upon prevailing foreign exchange rates, of approximately £5 million of costs related to FX losses on intercompany loans.
“These costs, which relate to our Nigerian business and are non-cash, are now treated as an adjusting item. As a result, our adjusted operating profit guidance for the year has been revised upwards, by £5 million, to £52-58 million.”
Cussons 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 2%.
“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.
“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.”