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(Alliance News) - PZ Cussons PLC on Wednesday reported a fall in revenue in the first half, with its first quarter performance struggling to match a boost in sales in the prior year from hygiene brand Carex.
Shares in the FTSE 250-listed personal and home care and beauty products firm were up 3.1% at 195.40 pence in London early Wednesday.
In the six months to November 30, pretax profit advanced 8.3% to GBP35.1 million from GBP32.4 million in the same period the year before.
Administrative expenses fell to GBP33.5 million from GBP39.2 million, while selling & distribution costs fell to GBP44.5 million from GBP49.0 million.
Revenue fell 9.3% to GBP283.7 million from GBP312.9 million. The firm noted its revenue slipped in the first quarter, but returned to growth in the second quarter.
"We have seen continued progress against both our new strategy and our pursuit of sustainable, profitable revenue growth. The first quarter revenue decline was driven primarily by Carex lapping unprecedented demand for Hygiene products at the peak of the Covid-19 pandemic in the prior year," Chief Executive Jonathan Myers said.
"The business returned to revenue growth in the second quarter with our core Baby and Beauty categories growing revenue in the first half overall. Revenue from Must Win Brands, excluding Carex, grew 10% and the overall business showed strong underlying momentum when comparing the results to the equivalent period two years ago. Continued price-mix improvements helped strengthen gross margin in the first half of the year, allowing us to increase Media & Consumer investment behind our brands and maintain our operating margin. These results demonstrate our ability to use the strength of our brands to protect margins in the face of cost headwinds."
PZ Cussons declared an interim dividend of 2.67 pence, flat on the year before.
Looking ahead, PZ Cussons said commodity and freight costs "show no sign of abating" in the near term, with the firm expecting cost pressures into financial 2023.
"Our focus is on both protecting our margins but also continuing to invest in the business, to secure future growth and build the capabilities we need to deliver against our strategy," it added.
By Paul McGowan; paulmcgowan@alliancenews.com
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