PZ Cussons warns on outlook after good start to year

(Sharecast News) - PZ Cussons said it had a good start to the current financial year but that it expected tougher trading with the UK and other markets in recession.
The maker of Imperial Leather soap updated on trading for the three months to the end of August as it reported a 33% drop in annual profit. It said it had started a strategic review of its business

Pretax profit from continuing operations fell to £29.3m from £43.6m in the year to the end of May as revenue declined 2.6% to £587.2m. The FTSE 250 company cut its final dividend to 3.13p a share from 5.61p taking the annual payout to 5.80p a share from 8.28p a year earlier.

Revenue recovered strongly in the first quarter, rising 23% to £158.1m at constant currency, helped by strong demand for hygiene products such as Carex and improved sales of beauty products. Revenue rose in all regions with growth strongest in Europe and the Americas at 49%.

Jonathan Myers, PZ Cussons' chief executive, 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 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."

Myers said the company was examining its strategy to "deliver sustainable top line growth and improved operating margin".