Progress at consumer goods group PZ Cussons (PZC) means a slower decline in revenue in the third quarter of the 2020 financial year than the previous two quarters. The company said its core brands had performed well in the three months to the end of February, with the Europe and Asia Pacific regions providing decent numbers.
Covid-19 has disrupted that progress. Management expects final quarter demand to be whacked by the outbreak of virus and subsequent lockdown, meaning annual profits are likely to be at the lower end of guidance. The beauty division has been especially badly hit, while the fall in the oil price has dampened the outlook for Nigeria – one of the company’s biggest markets.
It’s not all bad news. Soap products, including big brand Carex, have enjoyed a boost in the UK since the outbreak of the virus, but high demand has created challenges in sourcing packaging and raw materials.
Still, the group’s balance sheet remains strong, with net debt down to £116m from £183m this time last year. Target debt for the year-end is still £110m, in line with half-year guidance. Steps are being taken to manage cash by cancelling capital expenditure projects and reviewing the cost base, particularly in areas impacted by coronavirus.
