PZ Cussons lowers dividend after mixed results

Pre-pandemic, the group’s UK personal care business had been knocked by a Brexit-induced decline in consumer confidence. But the final leg of the reporting period saw a surge in demand for its Carex soap products, as the global health crisis took hold – with customers leaning towards “tried and trusted” names.

Still, simultaneously, the Covid-19 outbreak dampened PZ’s beauty-related sales. And further afield, the virus exacerbated ongoing economic difficulties in Nigeria – where falling oil prices added weight to the blow.

That mixed bag of circumstances knocked adjusted operating profits by 16 per cent to £66.1m. Statutory pre-tax profits tumbled by a third – hit by impairment charges on the five:am yoghurt brand and Rafferty’s Garden baby-food, as the group acknowledged a more negative outlook and macroeconomic assumptions.

It was, thus, encouraging to see that the new trading period has started well. First-quarter revenues soared by more than a fifth, underpinned by the group’s ‘focus brands’ portfolio. Even so, recently-appointed chief executive Jonathan Myers pointed to “highly volatile” conditions, with many of PZ’s markets entering recessionary territory. Some challenges are anticipated for the rest of the year.

Shore Capital expects adjusted pre-tax profits of £62.6m and EPS of 12.3p in FY2021.